Kainantu Resources Ltd (TSX-V:KRL) told investors it has received subscriptions and/or commitments for C$1.4 million for its offering of a non-brokered private placement of senior convertible debentures.
While the gold mining company said this is sufficient for its current initiatives, it noted that the offering enables it to accept subscriptions for total proceeds of up to C$1.8 million.
Among other things, it said the new funds will be used to complete the acquisition of the Kili Teke project in Papua New Guinea, which requires a further payment of US$400,000 to Harmony Gold Exploration, as well as to advance exploration programmes, including focusing on specific high-grade drilling targets at the Ontenu prospect at its KRL South project, also in Papua New Guinea.
"This funding represents a significant milestone for Kainantu Resources as we continue to unlock the value of our exploration assets, with particular focus on the Kili Teke project and targets at Ontenu, adjacent to K92,” CEO Matthew Salthouse said in a statement.
“On closing, funds will be immediately deployed to these two projects, which are key initiatives on the pathway to building intrinsic value across the KRL portfolio.”
Under the terms of the offering, the company will issue the convertible promissory notes to accredited investors. The notes will accrue interest at a rate of 10% per annum, compounded annually and will mature after 36 months.
After 12 months from the completion of the offering, the company said the notes will be convertible into units of the company for $0.08 per unit. Upon conversion, the units will be comprised of one common share and one full warrant allowing holders to acquire an additional share at $0.12 per share within 36 months of closing.
The company said the notes will close on or before June 10, 2023.
Kainantu Resources is an Asia-Pacific-focused gold mining company with four highly prospective gold-copper projects in Papua New Guinea, namely the Kili Teke Project, the KRL South, KRL North and the May River Project.
Contact the author at stephen.gunnion@proactiveinvestors.com