ASX-listed Kasbah Resources has secured an additional A$1.3 million convertible loan financing from its cornerstone strategic investor, Pala Investments.
The balance of the existing Pala convertible loan of A$5.6 million as at 30 September 2019, will be increased by the new loan of A$1.3 million.
In addition Kasbah has also exercised its option to extend the maturity of the loan for a further 12 months from 31 December 2019 to 31 December 2020.
Commenting on the financing transaction, Evan Spencer, Kasbah’s CEO, states:
“We are very pleased with the ongoing support of Pala in Kasbah and the Achmmach Tin Project.
"Kasbah has continued to make steady progress advancing project development and financing activities and is well positioned to take advantage when the tin market cycle recovers.”
John Nagulendran, Managing Partner at Pala, comments:
“We continue to recognise Achmmach as one of the only scalable near-term sources of new tin supply, making it one of the best strategic tin assets.
"We are pleased with the significant achievements of the Kasbah team in advancing the project development activities, including the recent success in proving continuity of tin mineralisation along the Sidi Addi trend.
"This additional funding demonstrates our confidence in Achmmach and the demand for large scale, low cost, tin production from safe and non-conflict locations."
Subject to satisfaction of certain conditions precedent including receipt of Kasbah shareholder approval, the conversion price of the existing convertible loan will be varied such that both the existing loan plus the additional convertible loan will be priced at A$0.05, being approximately 24% premium to Kasbah’s 20 trading day VWAP and 22% premium to the closing price immediately prior to the date of this announcement.
The proceeds received from the increase of the convertible loan, if approved by shareholders, will provide funds to maintain the Achmmach Tin Project in good standing and provide working capital as the company navigates through the current macro-economic environment.