Globe Metals & Mining Ltd (ASX:GBE) will focus on completing an updated bankable feasibility study (BFS) for the Kanyika Niobium Project in Malawi after receiving a short-term loan facility commitment of $2.3 million from non-executive director Bo Tan.
This commitment has been provided in lieu of a capital raising which the company’s board has elected not to proceed with.
As well as assisting in the completion of the BFS update, which includes potentially securing offtake agreements, the loan funds will provide working capital requirements.
Significantly, the loan funding proposed is non-dilutive for existing shareholders
Loan terms
The terms of the loan facility include monthly drawdowns as follows:
- A$300,000 (not before August 1, 2024);
- A$800,000 (not before September 1, 2024);
- A$600,000 (not before October 1, 2024); and
- A$600,000 (not before November 1, 2024).
This loan is subject to an interest rate of 18% per annum with interest to be capitalised and form part of the amount owing, subject to shareholder approval.
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The term is up to 10 months from the date of first drawdown or completion of a capital raising (debt/equity/pre-shipment funding) of not less than A$5 million, whichever occurs first. The lender may extend the loan term for a further two months at his discretion.
It is repayable in cash only and all or part of the amount owing may be repaid before the maturity date without penalty.
The security does not take effect until all relevant shareholder approvals are obtained, including approval under ASX Listing Rule 10.1.
Support acknowledged
The Board of Directors of the company wishes to acknowledge the continued strong support shown by Bo Tan and is appreciative of his commitment to the company.
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Kanyika Niobium Project is in central Malawi, about 55 kilometres northeast of the regional centre of Kasangu and is secured by Large-Scale Mining Licence No. LML0216/21 which grants the company security of tenure and the right to mine niobium, tantalum and deleterious uranium.
The Kanyika operations will produce a pyrochlore mineral concentrate that contains both niobium and tantalum in commercially valuable volumes to be shipped to a refinery for advanced processing into high-purity materials.