Scandium Canada (TSX-V:SCD) intends on completing a non-brokered private placement of unsecured convertible debentures to investors benefiting from prospectus exemption for a maximum of C$750,000 ($825,389).
Each debenture will be valued at C$10,000 and will bear interest at a rate of 10% calculated semi-annually, which will be due 12 months from the closing date of the offering.
Interest will start to accrue on the closing date and will be calculated and payable semi-annually in cash or in common shares at the sole option of debenture holders.
The principal amount will be convertible in shares at a price of C$0.02 per share.
Net proceeds of the offering will primarily be used for general administrative expenses (66%) and the development of aluminium-scandium powder (34%).
A convertible debenture is a form of long-term debt that can be converted into shares of equity stock after a specified period. They are usually unsecured bonds or loans, often with no underlying collateral backing up the debt.
These long-term debt securities pay interest returns to the bondholder like any other bond. A unique feature of convertible debentures is that they are exchangeable for stock at specified times. This gives the bondholder some security that may offset some of the risks involved with investing in unsecured debt.
Convertible debentures generally differ from convertible notes or convertible bonds, in that debentures have longer maturities.
Scandium Canada has the ultimate goal of bringing a global primary source of scandium into operation, enabling the development and commercialisation of aluminium-scandium (Al-Sc) alloys. The company is leveraging its Al-Sc alloy development subsidiary and the development of its Crater Lake mining project to meet the growing need for lighter, greener, longer-lasting, high-performance materials.
Write to Adam Orlando at Mining.com.au
Images: Scandium Canada
