Centrex Limited Secures Strategic Agreements to Strengthen Capital and Drive Expansion

Highlights:

• Centrex Limited (ASX: CXM) has secured strategic agreements that strengthen its working capital and provide a foundation for the Stage 1.5 Expansion at the Ardmore Rock Phosphate Mine.
• The company restructured logistics terms with Aurizon Operations Limited to address $16.9 million in accumulated logistics costs and ensure continued shipments.
• CEO Robert Mencel expressed confidence in Centrex's future, citing strong phosphate prices, a strengthening US dollar, and declining operating costs as key drivers for success at Ardmore.

Centrex Limited Provides Corporate Update and Ardmore Mine Progress

At the time of writing, Centrex Limited (ASX: CXM) has secured several strategic agreements that are set to enhance its financial position and bolster its operations. These agreements aim to provide a robust foundation for the company’s Stage 1.5 Expansion at the Ardmore Rock Phosphate Mine, which is wholly owned by Centrex's subsidiary, Agriflex Pty Ltd. These deals have been pivotal in addressing the company’s logistics and cash flow challenges.

Restructure of Trading Terms to Support Growth

Centrex faced significant logistics costs amounting to $16.9 million as of September 27, 2024, due to increased production and shipments at Ardmore. In response, Centrex renegotiated its trading terms with logistics provider Aurizon Operations Limited to ensure shipments continue smoothly. This restructure included the implementation of a General Security Agreement, guarantees, and a Deed of Forbearance, allowing the company to continue its operations without disruption. The revised terms are essential for meeting existing debts and paving the way for future capital raising efforts.

Positive Outlook for Ardmore Mine and Stage 1.5 Expansion

CEO Robert Mencel expressed optimism about the company’s future, noting the supportive agreements provide a clearer path to successfully completing the Stage 1.5 Expansion at Ardmore. He highlighted that Centrex is well-positioned to benefit from strong phosphate prices, a favorable US dollar, and reducing operating costs, which should drive positive cash flow and enable further growth. Despite recent cash flow challenges, Mencel remains confident in Centrex's ability to unlock the full potential of the Ardmore Rock Phosphate Mine and achieve long-term success.

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