QX Resources (ASX:QXR) underwrites Bayrock Resources’ AU$1.8M Rights Issue - Kalkine Media

Highlights

• Australia's Bayrock Resources Limited is focussed on critical battery minerals including nickel, cobalt and copper
• The rights entitlement issue prospectus has been lodged by Bayrock for raising funds amounting to AU$1.8 million
• After converting a portion of its debt to shares, QXR now holds ~16% shareholding in Bayrock

Australian-listed battery minerals and gold exploration and development company QX Resources Limited (ASX: QXR) has informed that it has underwritten a rights issue of Bayrock Resources Limited. Bayrock has battery minerals assets (Ni, Cu, Co) in the Scandinavian nation Sweden. Notably, QXR has converted existing debt of AU$255,000, payable by Bayrock Resources, into the latter's fully paid ordinary shares. 

The funds raised by Bayrock are earmarked to be used for exploration activities, including drilling at its highly prospective projects, towards repayment of debt (including QXR's) and other expenses.

Source: QXR ASX release dated 8 May 2023

Rights issue to fund Bayrock’s project development activities

QX Resources has previously announced a strategic partnership with Bayrock, including the provision of secured loans of AU$585,000. This investment by QXR helped Bayrock towards the acquisition of the Lainejaur and Northern Nickel Line projects. Notably, these projects are said to be highly prospective for important battery metals (Ni, Cu, Co) and considered high-grade Class 1 Ni-Cu-Co sulphide assets.

The move by QXR to convert a portion of its existing debt of AU$255,000 (including principal, interest, and fees) into Bayrock's ordinary shares and to additionally fully underwrite Bayrock's rights issue would enable Bayrock to recapitalise its balance sheet, undertake activities at its projects (including drilling) and repay debt owed to QXR and vendors.

About Bayrock Resources

The exploration company fully owns its multi-asset (battery minerals, gold, PGMs) focused portfolio in Sweden. Its flagship asset is the advanced stage Lainejaur project. The company has planned a multi-stage drilling program and more details on commencement and results will be provided in later updates.

After conversion of its debt of AU$255,000 into equity, QX Resources now holds ~16% of fully paid ordinary shares of Bayrock.

This is what QXR Chairman has to say about the latest development

QXR Chairman Maurice Feilich of QXR has commented that the conversion of loans into Bayrock shares shows the "strong confidence" QX Resources has in Bayrock's future prospects. He has also shown eagerness toward supporting Bayrock's exploration and project development efforts in Sweden.

Source: Company update  

The ASX shares of QXR were trading at AU$0.036 (market cap of over AU$31 million) midday on 9 May 2023.