JOHANNESBURG (miningweekly.com) – Aim-listed Stellar Diamonds has entered into a conditional convertible loan agreement with investment company Deutsche Balaton to raise $1.65-million through the issue of new convertible loan notes.
The proceeds of the convertible loan notes, as well as a subscription for new ordinary shares, would be used to provide ongoing working capital for the group as it sought to complete the mining licence application for its Tongo project, in Sierra Leone, while resuming trial mining of the 5-ha diamondiferous Baoulé kimberlite pipe, in central Guinea.
The application for the Tongo mining licence would be formally submitted in the near future, with the approval process anticipated to be completed later this year or early in 2016.
The company would issue 7.59-million new ordinary shares at 6.55p apiece, while it had also entered into a conditional subscription agreement and which would see Deutsche Batalon subscribe for 6.9-million subscription shares.
Deutsche Balaton would hold 29% of the enlarged issued share capital of Stellar Diamonds.
The weighted average loan note conversion price, new warrant exercise price and subscription price was about 0.31p per existing Stellar share, for a total investment of $4-million. The new warrants were exercisable following conversion or repayment of the convertible loan notes.