Pan Asia Metals (ASX:PAM) has entered into a binding capital commitment agreement with New York-based Global Emerging Markets Group for a four-year $35 million investment.
Global Emerging Markets (GEM) is a $3.4 billion alternative investment group that manages a range of investment vehicles, specifically focused on emerging markets globally. The company has completed over 570 transactions in 70 countries.
This commitment provides the $11.93 million market capitalisation company with a reliable source of equity funding to drive a mineral resource estimate and Prefeasibility Study for the Rosario Copper and Tama Atacama Lithium projects in South America.
This news follows Pan Asia’s decision to seek shareholder approval to rebrand to Flagship Minerals. The name change marks a break in Pan Asia’s exclusive geographic focus on Asia.
Managing Director Paul Lock says the company is seeking the name change due to investor confusion over the company’s geographic focus.
Under the agreement with GEM, Pan Asia can draw down up to $35 million at any point during the four-year period.
Lock says the company has been working on this agreement with GEM for several months and has found the team constructive and collegiate.
“The facility provides PAM a pathway to resource definition and prefeasibility at both the Rosario Copper and Tama Atacama Lithium projects, as well as working capital for the company’s other needs,” he says.
The facility, which reduces Pan Asia’s capital raising risks while also maintaining its capital raising flexibility, is subject to certain conditions.
These conditions include the provision of a drawdown notice to begin a 15-trading-day pricing period, with the subscription price being 90% of the higher of the average closing bid price of shares over that time and a fixed floor price nominated by Pan Asia equal or higher than the closing price immediately preceding the capital call.
Pan Asia adds that the facility is a “transformative” step for the company as it provides a pathway for near and medium-term funding requirements while not limiting it from meeting capital requirements from other sources.
Subject to shareholder approval, Lock will provide GEM with collateral shares equivalent to the commitment fee, calculated at 90% of the closing bid price upon signing of the agreement and re-calculated every 90 days thereafter until the fee has been paid.
Pan Asia Metals is a battery and critical minerals-focused explorer with assets in South-East Asia and South America. The company’s projects are considered prospective for lithium and copper.
Write to Aaliyah Rogan at Mining.com.au
Images: Pan Asia Metals
