Photo by: Reuters
PERTH (miningweekly.com) – ASX-listed Merlin Diamonds on Friday told shareholders that it was hoping to raise about A$10-million through the issue of unlisted debt notes to wholesale investors.
The company would seek to raise a minimum of A$7-million under the note offer from institutional and wholesale investors, with a further A$3-million set aside for over-subscriptions.
The notes would carry a 10% coupon rate and noteholders would have the right to convert into ordinary shares at 5c within the first 12 months if issuance, and following the first anniversary, noteholders would have the right to convert into ordinary shares at the lesser of 5c or the 10% discount price to the five-day volume weighted average price of Merlin’s shares immediately prior to conversion.
The financing was expected to provide Merlin with the funding to restart mining operations at its namesake mine, in the Northern Territory.
The decision to recommission the Merlin mine followed the completion of a mine feasibility study in 2014, and was also based on the current and projected diamond price and the lower Australian/US dollar exchange rate.
Furthermore, ore reserve increases through openpit and underground mining, as well as exploration upside, existed within the company’s portfolio of tenements, which would likely extend the current planned mine life at Merlin.