ABx Group (ASX:ABX) is heading into the Christmas break with an anticipated $1.8 million boost to its coffers after receiving binding commitments for a placement.
Convertible notes with a face value of $1 each will be issued to professional and sophisticated investors.
A convertible note is essentially a type of loan enabling an investor to convert their cash injection to equity at a later date.
The placement is being led by joint lead managers Sequoia Corporate Finance and GBA Capital.
ABx says the raising was “heavily supported” by existing shareholders and directors are also participating, with a $230,000 contribution.
Non-executive Chair Joycelyn Morton says the funds raised will be used to advance the development of the Deep Leads Project, ABx’s wholly owned rare earth deposit in northern Tasmania.
“Additionally, these funds will support the construction of a continuous pilot plant for our 83%-owned fluorine recycling subsidiary, ALCORE,” she says.
The notes will have a coupon rate of 12% per annum, which will be settled in shares issued at a 10% discount to the historical five-day volume weighted average price of ABx shares.
The issue is subject to shareholder approval at an extraordinary general meeting being held in early February 2025.
The placement will be undertaken in two tranches of 370,000 notes and 1.43 million notes, respectively.
The second tranche is subject to shareholder approval, which if received will entitle each noteholder to 12 free attaching unlisted options, exercisable at $0.08 within three years, for every note held.
In December, ABx received Tasmanian Government support for its 83% owned subsidiary ALCORE, which is developing a proprietary process to produce industrial chemicals from a waste product created during the aluminium smelting process.
The government has provided indicative terms and conditions for a $1 million, zero-interest, conditional loan to support the construction and operation of a continuous pilot plant in Tasmania.
ALCORE has previously demonstrated it can achieve 97% fluorine recovery using its process.
Write to Angela East at Mining.com.au
