Lithium and copper explorer Pan Asia Metals (ASX:PAM) has secured an extension to the maturity of some of its convertible notes in exchange for a lower conversion price.
In March 2024, the junior explorer received commitments to raise $894,619 via the issue of convertible notes, which had a one-year term and conversion price of $0.15 per share.
Convertible notes are a form of short-term loan under which lenders provide cash to a company and instead of the company returning cash to the creditors, they have the right to recoup their invested dollars by converting the loaned amount to shares.
Pan Asia, which has a market capitalisation of $10.2 million, recently offered note holders the opportunity to reduce the conversion price for half of their notes to $0.075 per share in return for extending the term of the other half of their notes by 90 days.
The company says 10 of the 14 note holders participated, resulting in 62% of the notes being adjusted. This covers $290,062 of the total loan amount.
The aim was to spread the maturity date of the notes rather than have all three tranches convert at the same time.
Managing Director Paul Lock says the result is a “great outcome” for note holders, who supported Pan Asia during “very poor market conditions” earlier this year, as well as for the company as the adjustment spreads the maturity dates.
Pan Asia is currently undertaking a geochemical program at its Rosario Copper Project in Chile.
The program includes the first ever induced polarisation survey at the project.
“The presence of small scale historical mines, and the proximity of the El Salvador copper mine, provide a high-level of confidence in the project,” Lock says.
Write to Angela East at Mining.com.au
Images: Pan Asia Metals
