Precious metals exploration company BBX Minerals (ASX:BBX) has executed a share subscription agreement with The Lind Partners entity Lind Global Fund for an investment of up to $9 million.
BBX reports this funding will address its short and medium term funding requirements and will enable it to execute near-term work on its mining and processing assets, supporting opportunities to ‘significantly’ improve company value.
The company notes it reviewed a range of funding alternatives and considers the terms proposed by Lind under the agreement to be the most favourable outcome to enable it to execute its near-term strategy.
As part of the agreement, Lind will pre-pay $3 million to BBX for a credit towards future share subscriptions of $3.45 million, and both parties may mutually agree to an additional $6 million of follow-on investments on a pro-rata basis. A commitment fee of $90,000 which represents 3% of the advance payment.
At the time of funding, BBX will issue 15 million shares to the investor. These shares will be counted as placement shares which will reduce the number of placement shares issued to Lind under the agreement. In the event of a termination of the agreement, Lind will make an additional payment to BBX equal to the outstanding number of initial shares multiplied by the purchase price as calculated at the time of the payment.
BBX reports the term of the agreement will be 24 months from the advance payment date, and notes that Lind will receive over 7.142 million listed options with an exercise price of $0.12 and an expiry date of 31 December 2025.
The subscription price is fixed at $0.1575 per share, while the variable subscription price is 90% of the average of the 5 lowest daily volume weighted average prices (VWAP) during the 20 trading days immediately before the date the shares are issued.
The agreement also stipulates that Lind can only request share issuances at the fixed subscription price for 60 days.
Subscriptions in relation to the issue of the subscription shares will be limited to a fixed subscription price for the first 2 months; a fixed subscription price with no limits and a variable subscription price limited to $170,000 per month from 3 to 12 months; and no limits for 13 to 24 months.
At its sole discretion, Lind can increase share issuance limits up to $750,000 for 2 months during the term.
Under the agreement, BBX will also have the right to forego issuing shares for any investor request for share issuance, and instead pay cash for the value of shares that would have been issued.
Commencing 30 days after the lock-up ends, BBX will have the right to repay 100% of the investment amount outstanding at any time by providing notice to Lind and repaying that amount in cash.
In circumstances where BBX exercises this buy-back right, Lind will have the option to exclude up to a third of the outstanding investment amount from being repaid and receive shares at the purchase price.
Commenting on the agreement, BBX Minerals Chief Executive Officer (CEO) Andre J Douchane says: “The initial investment under the agreement provides the company the necessary funds to finalise its bioleaching related work, including the commissioning of a pilot plant in Brazil.
“If the company opts to utilise the additional $6 million investment, this amount would be sufficient to execute on additional activities such as drilling”
If the company opts to utilise the additional $6 million investment, this amount would be sufficient to execute on additional activities such as drilling, an upgraded JORC resource, and the commencement of a feasibility study. Furthermore, it would enable the company to initiate its permitting activities.”
BBX Minerals is an ASX-listed mineral exploration and mineral processing technology company focused on its Três Estados and Ema Gold projects in the Amazon region of Brazil.
The company currently holds 270.5km-square of exploration tenements within the Colider Group, which is considered a prospective geological environment for gold, platinum group metals (PGM), and base metal deposits.
The Lind Partners manages institutional funds that are ‘leaders’ in providing growth capital to small and mid-cap companies publicly traded in the US, Canada, Australia, and the UK.
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