Aim-listed AfriTin has negotiated a potential funding package to finance the company’s existing operations at the Uis mine, in Namibia, as well as expansion plans for lithium and tantalum by-product development.
The proposed funding package is aimed at combining a capital structure and term sheets agreed with two financing institutions, for a package consisting of debt, a convertible bond, equity and royalty funding.
The equity placing and subscription should raise about US$22.8-million (about N$400 million) with new and existing investors. The placing is expected to occur in the next few weeks. If successful, it would be one of the largest placings having been undertaken on the Aim this year.
About US$7.5-million of the placing will comprise new ordinary shares to new and existing institutional investors, while US$10-million of the placing for new ordinary shares will be issued to cornerstone investor The Orange Trust, which is an existing shareholder with an 5.87% interest.
Next, Orion Resource Partners has agreed to a royalty, convertible note and equity subscription with AfriTin for US$25-million.
Additionally, a US$5.8-million lending facility with the Development Bank of Namibia (DBN), has already been announced on July 5 and comprises the debt financing part of the package.
The proposed funding package supplements a £4.5-million lending facility provided by Standard Bank Namibia in November last year, which has already been fully drawn down.
Should the proposed funding package proceed, the company will have US$48.3-million available to finance its activities, plus its cash on hand of US$2.2-million.
AfriTin says the Orion and DBN financing remains subject to certain conditions and approvals, including due diligence, definitive documentation and the consent of Standard Bank.
Although there is no guarantee that either source of funding will be entered into, nor that any money thereunder will be drawn down, AfriTin CEO Anthony Viljoen says he has every confidence that they will be.