24th Jan 2020 15:40
(Alliance News) - Shefa Gems Ltd on Friday said it has inked a EUR200,000 convertible loan agreement with an undisclosed investor to help fund development of the Kishon Mid-Reach project in northern Israel.
Shares in Israel-headquartered Shefa were up 16% at 3.78 pence in London in afternoon trading.
The lender is to provide precious stones miner Shefa with a EUR200,000 loan which, together with rolled up interest at 5%, can be converted into Shefa shares at a price of 5 pence per share.
The non-transferable loan will be provided in two equal tranches of EUR100,000, with the first due immediately and the second once Shefa receives a certificate of discovery from the inspector of mines.
With a repayment date of January 19, 2022, the loan also has a personal guarantee given by Shefa Chief Financial Officer David Ben David.
Once the second drawdown takes place, the lender will be issued with 3.4 million new Shefa shares as security on the loan, with the intention being that Shefa repurchases the shares within 24 months at 5p each in full repayment of the loan.
Should the undisclosed lender opt to keep the shares, Shefa will grant one unlisted warrant per share exercisable for a 24 month period from the date the lender elects to do so. These have an exercise price of 10p per warrant.
However, if the lender decides to sell any of the 3.4 million shares issued to it, Shefa will no longer be obliged to repurchase them.
Shefa Chair Michael Rosenberg said: "I am delighted to welcome this new investor in Shefa Gems who shares our belief and enthusiasm in this unique precious gems mining opportunity in the Kishon Mid Reach, northern Israel."
By Anna Farley; [email protected]
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