Walkabout Resources Ltd (ASX:WKT) has concluded interim funding measures implemented during the first six months of 2023.
The company has reached agreement with its EPC contractor Jinpeng regarding milestone payments. As per the latest terms, all milestones achieved up until now and those leading to practical completion will be settled in cash.
Furthermore, payments for post-practical completion contractual milestones, amounting to a maximum of US$500,000, will be made by issuing shares at 11c each.
This newly agreed-upon arrangement supersedes the previous agreement announced to the market on March 6, 2023, and later ratified by shareholders in the general meeting on June 12, 2023.
Regarding the most recent payment, it was sourced from the funds acquired under the senior debt facility agreement with Gemcorp. Another subsequent payment for the forthcoming contractual milestones is slated to be sourced from a second drawdown, which is scheduled for later this month.
WKT completed the first US$5.1 million drawdown on its Lindi Jumbo senior debt facility with UK asset manager Gemcorp on July 13.
Read more: Walkabout Resources completes first Gemcorp facility drawdown
WKT proposes share cancellation
In relation to the interim vendor funding previously secured from TNR, the company had issued a substantial 9.2 million shares as collateral. Following the repayment of TNR's interim funding, which was facilitated through a drawdown of the senior debt, the company is now gearing up to cancel those previously issued shares.
However, this decision is contingent upon the endorsement of the shareholders. The proposal for the cancellation of these shares is slated to be presented for approval at the forthcoming Annual General Meeting.
Bridging loan
WKT recently issued 4,227,273 shares at 11c each, a move that is instrumental in settling the remaining shareholder bridging loans.
As it winds up these interim financing efforts, it has been able to streeamline the Lindi Jumbo funding structure. The revised structure is as follows:
- A US$20 million Senior Debt Facility, of which a portion has already been drawn upon.
- A US$5 million Senior Debt Standby Facility which remains undrawn.
- An additional US$10 million Standby Placement Facility, which also stands undrawn.
- This simplified structure heralds a new chapter in tWKT’s financial management and stands to benefit the stakeholders in the long run.
“The preference for the use of senior debt for project construction has been a hallmark in the allocation of the company’s capital. As Lindi Jumbo is expected to be a high-margin project, this capital allocation will likely result in comparatively higher returns for shareholders."