Caracal Gold PLC (LSE:GCAT) said it has raised US$1mln via the issue of secured convertible loan notes to Orca Capital GmbH and the proceeds have been drawn down, also noting that discussions with Philoro Global Trading AG are progressing well.
The expanding East African gold producer also said it has granted Orca Capital an option to subscribe for up to a further US$4mln of loan notes.
Net proceeds shall be used to fund general corporate requirements and the company's working capital, Caracal Gold added.
The US$1mln drawn down follows the issue of the loan notes in a denomination of US$1 each due 31 January 2027 and accruing interest at a rate of 8% per annum. The loan notes are convertible into new ordinary shares at a price of 90% of the 10-day VWAP of an ordinary share prior to the business day, on which the noteholder serves the conversion notice on the company.
Caracal Gold also noted that in the discussions Philoro has confirmed its ongoing support for Caracal and Kilimapesa. An agreement is expected in due course, which will provide short-term funding as well as extend the existing financing announced in December 2022, the company added.
It also said legal counsel has been engaged to conduct a comprehensive review of the company's corporate governance, regulatory compliance and communications policies to strengthen internal procedures.
Chairman designate Simon Grant Rennick is also seeking to reach a settlement with Mill End for the full repayment of the Mill End facility, the company said.
In a statement, Robbie McCrae, CEO of Caracal commented: "We are very pleased to see the continuous support and trust from Orca Capital. This additional financing is a vote of confidence in the company as we seek to restructure our financing arrangements.
"We have received significant interest in financing the Kilimapesa and I am pleased that discussions in this regard are going well. We expect to provide a comprehensive update which will include an update on Philoro, Mill End settlement progress and summary of the capital and debt position of Caracal."