Magalies Quarry Business Plan — Funding Requirement and Structure
The funding requirement, the debt structure behind a capital-heavy plant, and the terms of each tranche.
Section 19 of 26
Funding Requirement and Structure
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- 1. Executive Summary
- 2. Investment Thesis
- 3. Company and Business Overview
- 4. Problem, Customer Need and Value Proposition
- 5. Industry Analysis
- 6. Market Analysis
- 7. Competitive Landscape
- 8. Products and Services
- 9. Business Model and Operating Model
- 10. Go-to-Market and Commercial Strategy
- 11. Management and Organisation
- 12. Regulatory, Licensing and Fiscal Framework
- 13. ESG, Rehabilitation and Community Impact
- 14. Strategic Plan
- 15. SWOT and Strategic Implications
- 16. Risk Analysis
- 17. Implementation Roadmap
- 18. Financial Plan and Projections
- 19. Funding Requirement and Structure
- 20. Investment Case, Valuation and Returns
- 21. Scenario and Sensitivity Analysis
- 22. KPIs and Management Dashboard
- 23. Conclusion and Recommendation
- A. Appendix A: Projected Income Statement
- B. Appendix B: Projected Balance Sheet
- C. Appendix C: Projected Cash Flow
A 45%-geared capital structure sized to the ramp, with a revolver and reserve that keep the project liquid through its cash-flow trough.
Sources and uses
|
Sources |
R’000 |
Uses |
R’000 |
|
|---|---|---|---|---|
|
Equity — Tranche 1 |
74,000 |
Phase-1 capital expenditure |
155,000 |
|
|
Equity — Tranche 2 |
26,000 |
Financing fees |
3,000 |
|
|
Senior term debt |
55,000 |
Debt-service reserve (DSRA) |
6,000 |
|
|
Asset finance |
28,000 |
Initial working capital |
7,867 |
|
|
Total committed |
183,000 |
Total |
171,867 |
A R45m revolving credit facility sits alongside the committed funding to absorb the mid-ramp cash trough; it peaks at about R35m and is progressively repaid as operating cash flow builds.
Capital expenditure schedule
Initial capital is committed at close; sustaining and Phase-2 expansion capital is phased across the ramp. Depreciation in the model is derived directly from these pools and their asset lives.
|
Capital expenditure (R’000) |
Initial |
Y1 |
Y2 |
Y3 |
Y4 |
Y5 |
|---|---|---|---|---|---|---|
|
Phase-1 initial capex |
155,000 |
— |
— |
— |
— |
— |
|
Sustaining & Phase-2 capex |
— |
4,000 |
16,000 |
15,000 |
9,000 |
13,000 |
Initial Phase-1 detail: Crushing & screening plant (Phase 1) R58,000; Electrical infrastructure (MV line, substation, MCC) R13,000; Civils, buildings, water & haul roads R28,000; Laboratory & ancillary equipment R2,000; Mobile fleet (excavators, loaders, ADTs) R33,000; Pre-operating, development & licensing R8,000; Contingency R13,000.
Working capital
Working capital is modelled on operating terms of 55 debtor days, 32 inventory days and 40 creditor days, giving a net cash-conversion cycle of about 47 days. As revenue grows, net working capital rises from R7.9m to R23.1m, a cash absorption that the funding plan explicitly covers.
|
Working capital (R’000) |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Accounts receivable |
7,676 |
13,018 |
17,249 |
21,027 |
23,258 |
|
Inventory |
4,195 |
5,790 |
6,978 |
8,080 |
8,812 |
|
Accounts payable |
-4,004 |
-5,680 |
-6,920 |
-8,181 |
-8,971 |
|
Net working capital |
7,867 |
13,128 |
17,307 |
20,926 |
23,099 |
Deleveraging
Net debt/EBITDA falls below 2x by Year 4 as EBITDA scales and debt amortises. The 24-month principal grace and Year-1 interest capitalisation on the senior facility keep early cash debt-service light while the plant ramps.