Akobo Minerals secures first phase of the Segele project financing

The remaining US$7 million for the final phase of the project is contemplated to be financed by additional debt and/or equity. Akobo Minerals is currently progressing its assessment of several financing alternatives.

Jørgen Evjen, CEO, comments:

“This convertible loan provides us with sufficient flexibility to explore the optimal financial structure for the overall project, benefitting the company and all of our shareholders. Supported by our major shareholders, in addition to a few new faces, I feel comfortable that we will reach a very good solution to see this project through to cash flow generation. In parallel to the financing we continue to deliver on plan with work at site on schedule. The processing plant design and supply phases are well underway and we expect major parts to arrive in Ethiopia within a short period. Contract mining negotiations are very advanced and we expect to break ground in October.”

The contribution of said amount, primarily from major shareholders, is structured as a short-term loan, maturing 12 months after the date of disbursement, which will be converted into shares in Akobo Minerals subject to certain conditions being met. The loan will be converted at a discount of 15% to any private placement of shares conducted in the next 12 months, or if no such private placement has taken place, at the lowest price per share of either (i) NOK 5.75 or (ii) the 30-day VWAP (with a 15% discount), after the expiry of such 12-month period. The company also has a contractual right to convert the loan prior to such 12-month period at the same pricing terms. The conversion of the loan will take place by each lender subscribing for shares in a private placement through off-setting the loan amount for each lender against the relevant subscription amount for the shares. The loan will carry a 5% interest, which will accrue and be converted together with the principal amount of the loan. The actual conversion of the loan will be subject to a resolution by the shareholders’ meeting of the company. If the company, for whatever reason, is not able to issue the required shares to the lenders, the loan shall be immediately repaid in full, together with accrued interest.

SpareBank 1 Markets acts as Financial Advisor to the company in relation to the Project Financing. Advokatfirmaet Schjødt is acting as the legal advisor to the company on Norwegian law matters.

Read the article online at: https://www.globalminingreview.com/mining/06072022/akobo-minerals-secures-first-phase-of-the-segele-project-financing/