Latin Resources Limited: $6.0M Funding and Earn-In Package to Advance Lithium Projects in Argentina
(firmenpresse) -
$6.0M FUNDING AND EARN IN PACKAGE TO ADVANCE LITHIUM PROJECTS IN ARGENTINA
HIGHLIGHTS
- $2million plus additional $4million, 24 month Convertible Security Funding Agreement (CSFA).
- A fixed conversion price of $0.015 per share representing 100% premium to the companys 5 day VWAP.
- An optional Project Equity Earn-In to Latins Lithium projects.
- Latin Resources can elect to pay back Convertible Note with cash at any time.
- Funds will be used to meet exploration, general corporate and working capital costs and to provide funding for Latins lithium and cobalt projects in Argentina.
19 June 2018, Latin Resources Limited (ASX: LRS) (Latin or the Company) is very pleased to announce that a $6 million Convertible Security Funding Agreement (CSFA) with an optional equity earn-in to Latins Argentinean lithium projects has been executed with Lind Asset Management XII. LLC, an entity managed by The Lind Partners New York (Lind). The CSFA will provide a source of capital to enable the Company to pursue its program of project development and exploration across its portfolio of lithium and cobalt projects in Argentina.
The key terms of the CSFA are set out below with further details provided in Appendix 1:
- Total funding of up to $6 million, including an initial amount of $2 million to be advanced to the Company, and a further investment of up to $4 million, subject to certain conditions having been met;
- 24 month term with a Face Value of $2.4 million for the initial investment, being 120% of the amount advanced (equivalent to an effective interest rate of 10%pa);
- The Company may elect to buy back the note at a discounted $2.15m Face Value within 3 months and $2.3 million within six months;
- Lind will be restricted from converting or selling shares for a period of 90 days (Restriction Period);
- After the 90 day Restriction Period, the Convertible Security may be converted into shares, in whole or in increments at 1.5 cents;
- Lind will have the option, with the permission of Latin, to waive the repayment of AU$2,400,000 and, instead, take 5% direct equity ownership into the lithium projects in lieu of repayment of the Face Value;
- The Company may elect to buyback any outstanding amounts at no premium; and
- Commencing 90 days after advancing funds, the Company must make monthly repayments of 1/20 of the original Face Value of the note. The Company may make these payments, at its option, in cash (at a 3% premium), or in shares (priced at 90% of the average of 5 daily VWAPS chosen by the Investor from the prior 20 Trading Days), or a combination of both (subject to share issue limits).
The initial investment will provide working capital to pursue exploration activities including the commencement of drilling at the Companys Catamarca lithium projects which have now been granted to the Company. The Company will be submitting drill permits for the Lomo Pelada and Ipizca 1 concessions in Catamarca (see ASX announcement dated 5 June 2018).
In addition, the Company will commence to define drill targets at its La Rioja cobalt project. Once these drill targets are defined, permits will be applied for with drilling to commence thereafter.
Managing Director Chris Gale commented, The CFSA facility provided by our funding partners, Lind, provides the Company necessary working capital as we expand operations in Argentina. This will also provide a source of funding for our new drilling campaign in Catamarca and La Rioja. Compared with an equity placement, the Convertible security funding provides a cost effective source of capital and may also reduce the potential dilution of existing shareholders.
Phillip Valliere, Managing Director at The Lind Partners, stated Lind is extremely pleased to be investing in Latin Resources for a second time. They have an exciting portfolio of lithium and cobalt projects targeting the battery metals sector, which we hope will deliver growth and shareholder value for all LRS shareholders.
For further information please contact:
Chris Gale
Managing Director
Latin Resources Limited
+61 8 6181 9798
Brooke Picken
Pac Partners
Melbourne
+61 3 8633 9866
About Latin Resources
Latin Resources Limited is a mineral exploration company focused on creating shareholder wealth through the identification and definition of mineral resources in Latin America. The Company has secured over 263,000 hectares of exploration concessions in the lithium pegmatite districts of Catamarca, San Luis and Salta Provinces, Argentina as well as 28,000 hectares prospective for Cobalt in La Rioja.
The company also has a portfolio of projects in Peru and is actively progressing its Iron Oxide-Copper-Gold and Copper Porphyry projects in the Ilo region with its joint venture partner First Quantum Minerals Ltd.
About The Lind Partners
The Lind Partners, founded in 2011, is a New York-based alternative asset management firm focused on small- and mid-cap companies listed in Australia, Canada, the UK and USA with an emphasis on the mining, oil & gas, biotech and technology sectors. Lind has completed over 70 direct investments for over $650 million in total value and is a supportive capital partner to investee companies. WWW.THELINDPARTNERS.COM
info(at)latinresources.com.au
www.latinresources.com.au
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Appendix 1 - Summary terms of the new Convertible Security Funding Agreement (CSFA)
General
Issuer: Latin Resources Limited (the Company)
Investor: Lind Asset Management XII, LLC (the Investor
)
Total Amount: AUD$6 million comprising three tranches:
· An initial A$2 million to be advanced to
the Company against the issue to Lind
of
a zero coupon convertible security with a f
ace
value of $2.4 million dollars. If
convertible note is paid back within 90
days the face value is $2.15m and if paid
back within 120 days the face value is
$2.3
m
· After the 90 day Restriction Period, if
the market capitalization is at least
equal to the market capitalization on the
execution date, and subject to the company
having available
capacity
and shareholder approval, Lind can on one
occasion advance the Company up to a
further $1.0 million against the issue to
Lind of further convertible notes. The
terms and conditions will be based along
the same terms as the previous $2m
facility.
· Up to a further $3.0 million may be advanc
ed
to the Company against the issue to Lind of
further convertible notes
once 75% of existing $2m note is repaid subj
ect to shareholder
approval.
The terms and conditions will be along the
same terms as the previous $2m
facility
.
Term: 24 months
Face Value: First Convertible Security - A$2,400,000 ($2
.15m if paid back within 90 days- $2.3m 120
days)
Re-investment Convertible Security - up to A
$1,200,000
Additional Convertible Security with
Company approval
- up to A$3,600,000.
Commitment-FeesFirst Convertible Security - A$50,000 and
-& the issue of 110,000,000 existing listed
Options: options, exercisable at A$0.01 per share
and expiring on 12 October
2019.
Re-investment and Additional $3m Convertible
Securities at election of Latin Resources -
A commitment fee of 4% of the amount
advanced under the Re-investment and
Additional Convertible Securities together
with listed options to a value of 50% of
the re-investment and additional amounts
advanced divided by the average daily VWAP
for the 5 trading days immediately prior
to the issue of
the Re-investment and the Additional Convert
ible Securities. The option exercise price
to be 130% of the VWAP for the 20 days
immediately prior to the issue date of
the Re-investment and Additional
Convertible Securities. The option term to
be 48 months from the issue date of the
Re-investment and Additional Convertible
Securities.
Lind may at its option elect to receive
listed options in place of some or all of
these
options.
Rank & SecurityGeneral Security Agreement over the Company
and pledges over the shares in the
Companys
subsidiaries.
Conversion: The Convertible Securities will be
convertible into shares, in whole or in
increments, on the Investor giving notice
of conversion to the Company during its
term. The conversion price will
be:
1. In months 0-3 - Restricted period - No co
nversions.
2. In months 4 - 24 - conversion to
listed shares at a fixed price of
A$0.015 per share.
Conversion The investor, may at any time with the
into Direct approval of
Project LRS
Interest and by notice to the Company, require the
Company to transfer a 5% direst interest
in the lithium hard rock projects in
Argentina, both current and projects
acquired during the Term of the Agreement,
by way of redemption of the whole of the
face value of
the First Convertible Security.
Lock Up Period No conversions of the First Convertible
Security to occur for the period of 90
days of the Execution
date.
Buyback In its sole discretion, the Company will
Rights: have the right to buyback, in
cash
, any or all of the outstanding face value o
f
the convertible securities at any time at n
o
premium (Buy Back Rights). Should the Compa
ny
exercise its BuyBack Rights, the Investor
will
have the option of converting up to 25% of
the
amount of the face value the subject of the
BuyBack Rights at the conversion price of
1.5c per
share.
Repayments: Commencing 90 days after advancing funds,
the Company must make monthly repayments
of 1/20 of the original Face Value of the
relevant note.
The Company may make these payments, at its
option, in cash (at a 3% premium), or
(subject to having available capacity at
the time) in shares (priced at 90% of the
average of 5 daily VWAPS chosen by the
Investor from the prior 20 Trading Days),
or a combination of
both.
Provided however that the maximum number
of new shares that the Company may issue
in respect of a note (on conversion or
repayment), without obtaining shareholder
approval in respect of the issue, will be
initially capped at 238 million shares
unless the Company obtains shareholder
approval in which event the
Convertible Securities will be subject to a
cap of the amount approved by
shareholders
.
Collateral 37,000,000 collateral shares will be issued
Shares: to Lind. An amount equal to a notional
subscription price of the
number of collateral shares remaining at
the end of the
term
(the Collateralization Price), will be
credited to the Company upon the repayment
of the outstanding face value of the
convertible securities, or
on satisfaction of Companys obligation to
issue shares upon the conversion of the
convertible securities. The
Collateralization Price will be equal to
90% of the average of five (5) consecutive
daily VWAPs, chosen by the Investor from
amongst the 20 trading days prior to
payment.
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