Manuka Resources (ASX:MKR) is restructuring its $18.2 million trade finance facility with Tennant Metals South Africa.
The company will convert $6.4 million of the debt into shares, valued at $0.075 per share – representing the same issue price as Manuka’s recent $15 million capital raising.
Over a two-year tenure, US$3 million ($4.56 million) will be restructured into a subordinated debt facility holding an annual interest rate of 14%.
The remaining US$4 million will follow the same terms as the subordinated debt facility, though restructured as a subordinated capital facility that can be redrawn through mutual agreement.
Tennant Metals will attain a 2% capitalised fee from the US$3 million term facility. This will be issued through 22.5 million warrants, exercisable at a price of $0.12 per warrant until 11 December 2026, subject to shareholder approval.
Manuka Executive Chairman Dennis Karp says the agreement allows the company to convert a portion of its debt into equity, holding a 50% premium to its current trading price.
“This is a great display of confidence in the value of the company’s assets as a whole and in particular our near-term precious metal production plans in the Cobar Basin that will see Manuka become the largest primary producer of silver in Australia,” Karp says.
The company intends to produce 10.9 million tonnes of silver and gold, containing 19 million ounces of silver and 47,000 ounces of gold from its Cobar Basin based assets.
Manuka Resources is an Australian mining and exploration company with key assets located in the Cobar Basin in central west New South Wales.
Write to Maddison Elliott at Mining.com.au
Images: Manuka Resources
