Aim-listed AfriTin Mining has secured £2.05-million in a new loan note facility, with the funds to be used to improve its financial position as production ramps up at its flagship Uis tin mine, in Namibia, and to mitigate any potential effects of the Covid-19 pandemic on future tin shipments or the company's wider supply chain.
The loan note facility includes the entering into of unsecured loan notes with Yellow Dragon Holdings, a private, strategic investor in African resource projects.
The notes, which are issued in tranches of £50 000, bear an interest rate of 10% a year, to be accrued and payable in full on redemption, and have a 12-month term.
As part of the agreement, the subscribers to the notes will receive ten warrants for every £1 subscribed, each warrant giving the holder the right to subscribe for one share in AfriTin. The warrants, which were issued on May 5, can be exercised at any time from the date of issue and will lapse after three years.
The exercise price of the warrants is 1.95p, being 130% of the company's closing share price on May 4.
With the uncertainty of the pandemic affecting the global economy and supply chains, the notes will provide added liquidity for the company and will support AfriTin in the upcoming months.
The company has reduced its mining activity and is actively assessing its cost base during the Covid-19 pandemic, to further secure the financial stability of the company. Any cost reductions implemented will not have an effect on the Phase 1 ramp up of the pilot plant at Uis, which remains the primary objective of the company.
AfriTin reiterates that it continues to take the necessary steps to mitigate the risk to its employees and local communities.
As part of the company's drive to help the local communities during the Covid-19 pandemic, the executive team will be donating a portion of their salary to a number of local community initiatives at Uis and the surrounding area.
There continue to be no confirmed cases of Covid-19 across the company's operations to date.
The Orange Trust, which owns 9.9% of the issued shares of AfriTin, wholly owns and controls Yellow Dragon, which is a company participating in the loan note issue. Yellow Dragon is subscribing to £2-million of the notes.