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Native Mineral Resources Holdings Limited (ASX:NMR) has finalized a convertible securities funding deal with Lind Global Fund III, LLC, raising AUD$3.5 million through a single convertible note with a Face Value of AUD$4.2 million. The note, with a six-month term, features a fixed conversion price of $0.066 per share and is designated to fund the company’s operations and general Capital/">Working Capital. Concurrently, NMR has submitted a statutory cleansing statement under the Corporations Act 2001 to permit the resale of shares issued upon conversion to retail investors without additional disclosure. This transaction marks NMR’s third convertible note issuance and occurs while the company has no Placement capacity under ASX Listing Rules 7.1 or 7.1A.
Key Points
- Company: Native Mineral Resources Holdings Limited (ASX:NMR)
- NMR issued one convertible note to Lind Global Fund III, LLC under a Convertible Securities Funding Agreement dated 2 July 2026
- Initial drawdown of AUD$3,500,000 received in exchange for a convertible note with a face value of AUD$4,200,000 — a six-month note with a fixed conversion price of $0.066 per share
- A cleansing statement lodged under section 708A(12C)(e) of the Corporations Act 2001 enables future on-sale of conversion shares to retail investors
- NMR currently has no placement capacity under ASX Listing Rules 7.1 or 7.1A; shareholder approval for conversion and repayment shares will be sought within 90 days
- Investors should monitor the upcoming shareholder meeting, any ASX Listing Rule 7.3.4 Waiver application, and potential share dilution if the note is converted
Details of NMR’s AUD$3.5 Million Drawdown and AUD$4.2 Million Face Value Convertible Note
On 2 July 2026, Native Mineral Resources Holdings Limited announced completion of the initial drawdown of AUD$3,500,000 under its Convertible Securities Funding Agreement with Lind Global Fund III, LLC. In return, NMR issued a convertible note with a face value of AUD$4,200,000, reflecting a premium over the cash received. This structure incorporates the embedded cost of funds rather than a conventional Interest Rate approach.
The note’s six-month maturity implies near-term obligations for NMR. The company stated that proceeds will support its Business operations and general working capital, though no detailed allocation of the AUD$3.5 million was provided.
Impact of the $0.066 Fixed Conversion Price on NMR’s Capital Structure
The convertible note’s fixed conversion price of $0.066 per share grants Lind Global Fund III, LLC the right to convert the note’s face value, in whole or in part, into ordinary NMR shares at this price upon notice. The total shares issued upon full conversion will depend on the amount converted, with $0.066 per share as the conversion basis.
The NMR board described the funding as having a relatively low dilution risk and cost compared to alternative financing options and considers it beneficial to shareholders. However, this assessment is qualitative; actual dilution will depend on factors such as the prevailing share price relative to the conversion price and the extent of conversion versus cash redemption.
NMR’s Third Convertible Note Following Prior Instruments from December 2025 and May 2026
The note from Lind Global Fund III increases NMR’s total unquoted convertible notes from two to three. Previous notes were announced on 24 December 2025 and 6 May 2026, collectively referred to as Existing Convertible Notes. NMR’s pro-forma consolidated financial position, based on the 30 June 2025 audited year-end, incorporates all three notes on an illustrative basis.
Investors should note that multiple convertible notes represent secured Liabilities and potential future share issuance. The update indicates the AUD$3,500,000 proceeds will increase cash before costs and may be partially used to reduce existing Debt, implying some funds may extinguish prior liabilities rather than fully fund new operations.
Significance of the Corporations Act Section 708A Cleansing Statement for Retail Investors
The cleansing statement lodged under section 708A(12C)(e) of the Corporations Act 2001 removes restrictions on the resale of shares issued upon conversion of the note to retail investors. Since the note was issued without Full Disclosure under Part 6D.2 to sophisticated investors, converted shares would otherwise be subject to resale limitations. This legal step enables free trading of conversion shares by retail participants.
NMR clarified that neither ASIC nor ASX endorses the cleansing statement’s content and advised interested parties to review it fully. The statement applies solely to the convertible note issued on 2 July 2026; future notes will require separate cleansing notices.
NMR’s Lack of Placement Capacity Under ASX Listing Rules 7.1 and 7.1A and the Need for Shareholder Approval
NMR disclosed it currently has no placement capacity under ASX Listing Rules 7.1 or 7.1A, which limit share issuance without shareholder approval to 15% and an additional 10% respectively within 12 months. Consequently, NMR cannot issue conversion or repayment shares under the funding agreement without shareholder consent.
This condition means if approval is not granted, NMR must repay or convert the note entirely in cash. The update also mentions Lind Global Fund III may have rights under a Share Pledge Agreement in such cases, though details are not specified. This pledge indicates secured interests that could affect shareholders if cash repayments are unmet.
Upcoming 90-Day Shareholder Meeting and ASX Listing Rule 7.3.4 Waiver Application
NMR plans to hold a general meeting within 90 days to seek shareholder approval for all securities potentially issuable under the funding agreement, including conversion and repayment shares. This timeline aligns with standard market practice for convertible note ratifications and will be a critical event for investors.
The company also intends to apply for an ASX Listing Rule 7.3.4 waiver, which normally requires securities approved at a meeting to be issued within three months. The waiver would allow issuance beyond this period, accommodating the note’s six-month term and timing of conversion or repayment events.
Pro-Forma Balance Sheet Effects Including the AUD$4.2 Million Secured Liability
NMR prepared a pro-forma consolidated statement of financial position based on the 30 June 2025 audited accounts, treating the convertible notes as if issued on that date without other transactions. This illustrative document shows an increase in cash of AUD$3,500,000 before costs and debt reduction, an increase in convertible notes from two to three, and recognition of a secured liability of AUD$4,200,000.
The pro-forma has not been independently audited. Investors seeking current financial details should consult NMR’s latest financial statements and disclosures.
Conversion Share Rights and Note Redemption Procedures
Shares issued upon conversion will rank equally with existing ordinary shares. Lind Global Fund III may trigger conversion at $0.066 per share by notice, while NMR can redeem the note by cash payment or issuing repayment shares, subject to shareholder approval.
Schedule 1 of the cleansing notice outlines the rights and restrictions of the note, though it is not exhaustive. Investors are advised to review Schedule 1 and the full Convertible Securities Funding Agreement for comprehensive terms. The forthcoming shareholder meeting and ASX waiver application will be key milestones.
Investor Insights on Lind Global Fund III and the Share Pledge Agreement
Lind Global Fund III, LLC is the sole counterparty to the funding agreement. A Share Pledge Agreement forms part of the security arrangements, but details on pledged Assets and enforcement conditions are not fully disclosed. Interested investors should consult the full funding agreement referenced in NMR’s 2 July 2026 announcement.
The immediate impact on NMR’s share price was unclear at publication. The transaction provides near-term capital but introduces contingent obligations dependent on shareholder approval, ASX waiver outcomes, and Lind Global Fund III’s conversion or redemption decisions. Investors will likely monitor these developments closely as NMR progresses.
