Exploration and mining company, Metminco Limited (ASX: MNC) has received firm commitments for the issue of unsecured convertible notes to raise up to $1 million, to support the proposed merger with Andes Resources Limited, as announced on 13 March 2019.
As per the release, the proceeds of the unsecured convertible notes will be used to fund the company’s working capital requirements and to progress the proposed merger. The funds will be used in undertaking geophysical and geochemical work to refine drill targeting at the Chuscal Gold Project in Colombia. The funds will also go towards satisfying the proposed $4 million (before costs) capital raising, Metminco intends to undertake, in conjunction with Andes, as part of the Proposed Merger.
While commenting on the success of the capital raising, the company’s Executive Chairman, Mr. Kevin Wilson said that the company’s Management team is overwhelmed with positive feedback from a large number of the major shareholders and a number of new investors who share their enthusiasm for the proposed merger with Andes.
He further commented on the proposed merger by stating that the merger will create a Colombian gold business with a much deeper pool of highly prospective exploration assets in a much sought-after region in the Mid-Cauca Gold and Copper-Gold Belt. As this region has yielded multiple multi-million-ounce gold and gold-copper deposits, the company’s Management is very excited by the prospect of combining a plethora of large targets within this richly endowed gold belt.
With a face value of $3,000 each, the convertible notes will be issued in a single tranche, however, they will convert into fully paid ordinary shares in Metminco in two tranches. Under tranche 1, the shares resulting from the conversion of the first 115 Convertible Notes will be issued under the Company’s existing placement capacity. Under tranche 2, the Shares resulting from the conversion of the remaining 219 Convertible Notes will convert subject to Metminco shareholder approval. Convertible Notes under both the tranches will be converted at a conversion price of $0.003. If the proposed merger is not completed the conversion price for the Convertible Notes will reduce to $0.002.
To take the shareholder’s approval for the conversion of the Tranche 2 Notes, the company is planning to conduct a shareholder’s meeting in the second quarter of 2019.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $0.002, with the market capitalization of ~$2.38 million as on 15 March 2019 (AEST 02:28 PM). In the past six months, the share price of the company declined by 50.00% as on 12 March 2019. It has 52 weeks high of $0.017 and 52 weeks low of $0.002.
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