PERTH (miningweekly.com) – Minerals explorer Latin Resources has secured a A$6-million convertible security funding agreement (CSFA) with an optional equity earn-in into the company’s lithium projects in Argentina, with financier Lind Asset Management XII.
The funding will include an initial A$2-million, which will be advanced to Latin Resources, and a further investment of up to A$4-million, subject to certain conditions being met.
The ASX-listed company said on Monday that the CSFA will provide a source of capital to enable the company to pursue its programme of project development and exploration across its portfolio of lithium and cobalt projects in Argentina.
“The CSFA facility provided by our funding partners, provides the company necessary working capital as we expand operations in Argentina,” said Latin Resources MD Chris Gale.
“This will also provide a source of funding for our new drilling campaign in Catamarca and La Rioja. Compared with an equity placement, the convertible securing funding provides a cost effective source of capital and may also reduce the potential dilution of existing shareholders.”
The CSFA will have a 24-month term with a face value of A$2.4-million for the initial investment of A$2-million, being 120% of the amount advanced. Latin Resources could elect to buy back the note at a discounted A$2.15-million within three months, and $2.3-million within six months.
Lind will be restricted from either converting or selling shares for a period of 90 days, after which the convertible security could be converted into Latin shares at a price of 1.5c each.
Lind will have the option to waive the repayment of A$2.4-million in favour of a 5% direct equity ownership into the lithium projects.