Aurumin Ltd (ASX:AUN) is net-debt free and in a position to close out the remaining convertible notes with available cash after completing the sale of the Mt Dimer mining leases and miscellaneous licences to Beacon Minerals Ltd (ASX:BCN) and completing a placement.
As well as receiving cash consideration of $3 million for the sale, the company also retains an interest in future gold production above 12,000 ounces as well as all other minerals at the tenements 120 kilometres northeast of Southern Cross in WA by way of a 2% net smelter royalty.
Convertible note balance reduced
Funds from the sale have been used to reduce the outstanding balance of the convertible note held by Collins St Asset Management Pty Ltd. Aurumin has, in addition, made a further repayment of $363,000.
The outstanding balance of the convertible note is reduced to $1.071 million and the company will proceed with closing out the note in the near term.
READ: Aurumin completes sale of Mt Dimer assets
$1.25 million raised
Firm commitments have been received for a total of 50 million shares at $0.025 per share to raise $1.25 million in a placement to Collins St Asset Management (34,504,512 shares), Middle Island Resources Limited (5,495,488 shares) and 7 Enterprises Pty Ltd (10 million shares).
Also, subject to shareholder approval, there will be one free attaching option for each one share issued, with an exercise price of $0.06 and an expiry date of December 22, 2026.
Daniel Raihani is a non-executive director of Aurumin and the beneficial owner of 7 Enterprises Pty Ltd. As such, the placement to 7 Enterprises Pty Ltd is subject to shareholder approval.
“Good outcome”
Aurumin's managing director Brad Valiukas said: "The combined transactions are a good outcome for Aurumin.
"The company is now net-debt-free and in a position to close out the remaining convertible note with available cash.
"In addition, we maintain upside from the Mt Dimer Mining Tenements, from future exploration and production."
Mining tenements M77/427, M77/428, M77/957, M77/958, M77/965, P77/4568, L77/0083, L77/0135, L77/0147, L77/328 (application), L77/329 (application), L77/330 (application) and L16/135 (application) have now been divested by Aurumin.
Support “has been great”
"The support from the board and existing shareholders, through 7 Enterprises and Middle Island, respectively, has been great during this process and in the completed placement,” Valiukas said.
"We are also pleased to welcome Collins St as a shareholder and appreciate their support in the placement.
"I look forward to commencing the new year with a clean balance sheet and a clear focus on advancing our flagship 946,000-ounce Sandstone Gold Operations and generating the critical mass for future production," the MD added.