QMines Ltd (ASX:QML), through its wholly-owned subsidiaries, has entered into two loan agreements for a total of $1.5 million with Jayleaf Holding Pty Ltd and Olgen Pty Ltd.
Capital raised from the loans, along with the company’s existing cash reserves, will be used to accelerate the pre-feasibility study (PFS) at the company’s flagship Mt Chalmers and Develin Creek copper projects near Rockhampton in Queensland.
QMines expects that the loans, together with the company’s existing cash reserves, will provide sufficient working capital to complete the PFS without needing to raise further capital, minimising dilution for existing shareholders.
The loans will be secured against the company’s 100%-owned five rural properties at the Mt Chalmers project and its RC drill rig and associated equipment.
Loan terms
Under the terms of the loans, Jayleaf and Olgen have committed $1 million and $500,000 respectively, earning a 15% per annum interest rate on their loan amounts to be settled upfront in fully paid ordinary shares issued at $0.075 per share.
The loans are repayable in cash within 12 months from the date of advance, being January 29, 2024. The shares will be issued within the company’s existing 15% placement capacity with Jayleaf to receive 2 million shares and Olgen to receive 1 million shares respectively.
Pre-feasibility study underway
QMines executive chairman Andrew Sparke said: “We wish to sincerely thank the principals of Jayleaf and Olgen for their continued support of the company as we continue to accelerate the development of the company’s Mt Chalmers and Develin Creek copper projects in central Queensland.
“It is expected that the loan funds, together with the company’s existing cash reserves, will provide sufficient working capital to complete the planned pre-feasibility study, expected in Q2-2024, without the need for a further capital raising.”