Alecto Minerals will use these funds to restart operations at the Mowana copper mine in Botswana and to fund certain transactional expenses for the completion of the reverse takeover process of Cradle Arc Investments. Cradle Arc Investments owns Mowana.
The convertible loan notes have been subscribed to by clients of Beaufort Securities, Alecto Minerals’ broker.
Alecto Minerals said that the net funds raised from the issue of the notes will be used to provide a loan of up to $1 million to Cradle, which it will use to restart operations at Mowana.
Fujax Minerals and Energy, the South African minerals and energy trading company providing off-take financing to Mowana, will match Alecto’s loan to Cradle, thereby providing Mowana with funding of up to $2 million in the short-term – with the aim of bringing the mine back into production in Q1, 2017.
The balance of the funds raised will be used for general working capital purposes, including the transactional expenses relating to Alecto Minerals’ proposed acquisition of Cradle through a reverse takeover process.
Alecto Minerals’ CEO, Mark Jones, commented: “We are delighted that the investment potential of Mowana is recognised and that we have been able to secure these funds to support Alecto’s transition from developer to producer.
“It is extremely exciting that our loan of $1 million to Cradle will be matched by Fujax, thereby meeting our $2 million budget requirement to recommence operations at Mowana.
“The injection of these funds means that we can continue to advance the reverse takeover process and securing of shareholder approval for the Mowana transaction, while at the same time starting production of saleable copper from the mine, allowing Alecto to benefit from its management contract at the mine.
“We have made good progress on the ground in Botswana, with work completed at Mowana comprising the clean-up and recommissioning of equipment, detailed mine planning and design and the recruitment of new personnel.
“This investment marks a major step forward in bringing the project back into operation and Alecto’s management is working closely with our partners to restart production and complete the acquisition.”