Lithium and copper explorer Pan Asia Metals (ASX:PAM) has secured $250,000 in bridging convertible note funding to give it more time to negotiate a larger funding facility.
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.
Managing Director Paul Lock says the junior explorer is in negotiations with several investment firms for an equity funding facility which will provide Pan Asia with more funding certainty in the current investment environment.
“The facility, if agreed, has the potential to fund Rosario through to a JORC mineral resource and initial feasibility studies,” he says.
Novus Capital was the lead manager and arranger for the unsecured convertible note and will receive a fee of 6% on the funds raised.
The convertible notes have a term of 18 months and can be converted after six months, with the conversion price calculated at 90% of the 10-day volume weighted average price.
The notes yield 16% and can be redeemed at Pan Asia’s option.
The cash raised will be used for working capital purposes while Pan Asia negotiates the larger funding facility.
Lock says in the meantime, progress is being made at Pan Asia’s Rosario Copper Project, with first pass geochemical exploration results imminent.
“Rock chips and geophysics will follow later this month,” he says.
“The company expects to engage a drilling contractor during November, with a drill start expected in late November/early December.”
The Rosario Copper Project is located in Chile’s central copper belt, 10km north of the El Salvador copper mine, which has been in operation since 1959.
Write to Angela East at Mining.com.au
Images: Pan Asia Metals
