Eclipse Metals Ltd (ASX:EPM) has secured a convertible loan agreement for A$300,000 with Oz Yellow Uranium Ltd and continues its commitment to jointly fast-track the proposed Northern Territory uranium asset spinout.
The agreement aims to bolster the company’s working capital, with a repayment date set for December 31, 2023.
Eclipse Metals Ltd (ASX:EPM) is divesting its Ngalia Basin and Liverpool uranium projects in the Northern Territory to OZ Yellow Uranium.
But it’s not the end for Eclipse’s presence in the Territory. The company intends to maintain exposure to these projects through its shareholding and board representation in Oz Yellow.
The agreement comes at a time when uranium market has been gaining significant momentum with prices reaching a 15-year high.
15-year high
Eclipse executive chairman Carl Popal said: “We are pleased to secure the investment funding agreement with Oz Yellow Uranium and continue the commitment to jointly fast-track the proposed uranium asset spinout.
“This is a further testament of confidence as investors appreciate the value of the company’s uranium assets.
“Prospects for the uranium market have improved remarkably during recent months and the spot price of uranium has reached a 15-year high.
“The company’s 100% owned uranium portfolio in the NT is well positioned to take advantage of the rising trajectory in the uranium market to fast-track development of its NT assets.”
Key terms
Key details of the convertible note include a no-interest clause and the absence of security requirements.
Should Oz Yellow complete the previously referenced Heads of Agreement by the stipulated repayment date, an Automatic Repayment Event will be triggered, settling the outstanding amount in full.
The repayment date stands at December 31, although this can be altered through mutual agreement.
The convertible note is also designed with flexibility, allowing Eclipse Metals the option to convert the outstanding amount into company shares under specific conditions.
These include a conversion price, pegged either at A$0.008 or a discounted rate based on the volume-weighted average price of EPM shares on the ASX for the preceding 60 trading days.