HomeNewsMoroccan tin project pushing for construction start-up in H1, 2019

Moroccan tin project pushing for construction start-up in H1, 2019

ASX-listed Kasbah Resources has secured a A$5 million convertible loan financing from its cornerstone strategic investor, Pala Investments which represents strong confidence that the company will move its Achmmach tin project into construction in H1, 2019.

The balance of the existing Pala loan, which at the time of shareholder approval will be A$3.5 million (plus accrued interest and capitalised charges), will be further increased, extended and rolled into the convertible loan, providing up to $1.5 million of additional funding.

The additional proceeds received from the advance under the existing loan agreement and convertible loan, if approved by shareholders, will be used to fund preliminary development expenditure in relation to the Achmmach tin project for project financing, engineering and technical optimisation work, and provide working capital.

Pala will make an immediate advance of A$500 000 under the existing loan agreement and extend the maturity date of the existing loan from 31 December 2018 to 31 March 2019 to allow Kasbah to continue with the execution of its plans while shareholder approval is sought for the convertible loan, expected in December 2018.

“This commitment of additional funding follows Pala’s initial strategic investment in Kasbah in December 2016 and will bring Pala’s total equity and loan investment in Kasbah to in excess of A$10 million since that initial investment,” says Russell Clark, Kasbah CEO.

“We carefully considered our near-term funding options prior to agreeing to proceed with the Pala convertible loan proposal. It is important to note that Kasbah remains free to progress any alternative funding proposals that emerge prior to the shareholder vote that is expected to be held in December 2018.”

Financial close on the convertible loan facility is expected to occur by end of December 2018 following receipt of all applicable approvals and satisfaction of customary closing conditions.

If Pala were to convert all of its loan under a fully drawn facility due to mature 31 December 2019, and based on Kasbah’s current issued capital, Pala would hold a maximum voting power in Kasbah of approximately 46%.

If maturity was extended to December 2020, then the maximum voting power of Pala on the same capital base would be 49%.