3rd Feb 2020 16:41
(Alliance News) - Ironveld PLC on Monday said it has inked definitive agreements to raise around GBP260,000 via short-term loan facilities.
The unsecured loan facilities have been arranged between vanadium project developer Ironveld and "a consortium of high net worth investors and existing shareholders".
Ironveld intends to use the loan "for working capital purposes" as it seeks funding for its South African high-purity iron powder, titanium, and vanadium project.
The GBP260,000 will be loaned in tranches, starting with GBP110,000 due by February 14 and then another three monthly tranches of GBP50,000 each at Ironveld's election until all the funds are lent.
Every tranche of the loan matures six months from the date Ironveld receives it. Lenders may opt to receive interest payments in the form of shares at a price of 1 pence each. Shares in Ironveld closed up 23% at 0.80p in London on Monday.
In addition, Ironveld has issued 26.0 million share warrants with a subscription price of 1p per share to its lenders, pro rata to the amount of each loan. These warrants have a two-year life and lender can use outstanding loan balances to exercise the warrants.
Iornveld Chair Giles Clarke contributed GBP10,000 to the loan facilities and was issued 1.0 million share warrants. The firm's largest shareholder, Tracarta Ltd, contributed GBP50,000 and received 5.0 million warrants. Tracarta holds a 12% stake in Ironveld.
Chief Executive Martin Eales said: "I have been highly encouraged by the discussions we have had so far with parties potentially interested in participating in the financing for our project. Until we are in a position to conclude this financing, the loan facilities announced today are extremely helpful in ensuring that our modest short-term working capital requirements are met.
"Additionally, any issue of new shares via the Warrants or in interest payments will be at a substantial 60% premium to the underlying share price, thereby minimising the potential dilution for shareholders."
By Anna Farley; [email protected]
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