S&P ups Bemax to positive

Standard & Poor's said that it affirmed the B- corporate credit and senior-unsecured debt ratings on Bemax Resources Ltd. and revised the outlook on Bemax to positive from stable. S&P affirmed the recovery rating of 4 on the senior debt of Bemax.

The positive outlook is underpinned by the completion of the company's Snapper mine development, which was commissioned in early 2011 and is ramping up to full capacity, the agency said. The successful commissioning of the mine is key to an improvement in Bemax's currently weak financial performance and the company's long-term viability.

The positive outlook also reflects the expectation of an improving financial profile due to improving product prices and better product mix following the start of operations at the mine, the agency added.

The ratings on Bemax reflect the company's historically weak earnings, highly leveraged credit metrics, lack of business and asset diversity and exposure to volatile commodity prices, the agency said. Partly offsetting these weaknesses is the company's ownership and support by industry player Cristal.

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