On 27 September 2018, Tawana Resources NL’s (ASX:TAW) share prices increased by 20% after the company reported about securing a funding package comprising a binding term sheet with Tribeca Investment Partners (Tribeca) and other investors for the provision of secured $20 million debt facility to Tawana and a secured $20m standby line of credit conditional on the merger between Tawana and Alliance (Merger).
This Conditional MergeCo Facility will increase balance sheet liquidity of the company and it will ramp up lithium production and advance optimization of the Mine and the processing facilities.
The company is planning to use the $15 million of the $20 million Tawana Facility to advance the DMS fines circuit, upgrade the tantalum circuit and for additional working capital. On 5 April 2018 the Scheme Implementation Agreement (SIA) was announced and this debt package was contemplated in it.
The remaining $5 million of the $20 million Tawana Facility will be used to repay the Red Coast loan. The Company has also obtained a secured $20m standby line of credit from Tribeca and other investors which will be available to the group formed by Alliance and Tawana following the Merger (Merged Group). It is conditional on the Merger being implemented. The company is expecting the Merger will be completed in November 2018 as supplementary disclosure for the Merger is now required following the establishment of the new facilities. On 27 September 2018, after the announcement of debt funding package the company announced the restatement to the official quotation.
In the first half of FY 2018, the company earned a revenue of $127,000 which was $30,000 in the previous year. The loss after tax of the company increased from $5.07 million in 1H2017 to $7.25 million in 1H2018. The basic and diluted loss per share decreased from 2.78 cents in 1H2017 to 1.41 cents in 1H2018. The total assets of the company also increased from $72.3 million to $99.61 million. The cash used in operating activities is $1.91 million in 1H2018.
TAW’ share traded at $0.300 with a daily volume of 2,466,314 as on 27 September 2018 (AEST 2:57 PM).
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