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London - Miner African Minerals plans to increase export volumes and boost revenues by reducing discounts and requiring a premium on some of its iron ore, the company said on Friday, as part of a recovery plan aimed at shoring up its battered finances.
The West Africa-focused iron ore miner has come under heavy pressure this year, hit by a 40% drop in the iron ore price s statement that its projects remained unaffected by the epidemic.
Friday's announcement lifted the stock as much as 12.5%. The shares were up 4.2% at 25p at 08:20 GMT.
Under the plan - presented by chief executive Alan Watling and approved by the company's board - African Minerals said all future shipments would be sold at a fair market price, adding it was supported by its main buyer and partner, China's Shandong Iron and Steel Group (Shandong).
Last month, the company agreed with Shandong, the partner on its sole project, Tonkolili, that it would get immediate access to $248m in cash that was previously earmarked for the second phase of the mine's expansion.
African Minerals said it has already drawn $82m from this fund, used primarily as working capital, and is planning to draw a further $161m in September and October for essential payments and to cover operating losses and debt repayments until the project becomes cashflow positive.
"The work currently underway.... leads me to expect that this project will become cashflow positive, assuming that the iron ore price environment remains broadly unchanged, by the end of this year," Watling said in Friday's statement.
The company will publish its half year financial results and an update on the re-financing progress on September 30.
African Minerals said it expected operations at its project in Sierra Leone to see no material impact from the three-day countrywide lockdown intended to help curb the spread of Ebola.
