Andrada Mining Ltd (AIM:ATM, OTC:AFTTF) has raised £7.7 million of new capital and at the same time told investors that it has now kicked off the commissioning of operations at its pilot plant in Namibia.
Proceeds are earmarked for an expansion of Andrada’s tin, tantalum, and lithium exploration and production circuits, plus working capital.
Andrada chief executive Anthony Viljoen highlighted that the company “is well-positioned to be a significant supplier of technology metals globally and to be the first AIM-listed lithium producer."
The company, in a stock market statement, said it has issued to new and existing investors 77 allotments of convertible loan notes - each one comprising £100,000 worth of notes plus share warrants.
Meanwhile, in the field, commissioning has begun for both the bulk sampling plant and the tantalum circuit.
These elements started in line with the project timeline outline in May, the company noted.
"The completion of the construction phase of the lithium bulk sampling facility is an important milestone for Andrada, as it allows the company to advance its exciting lithium expansion programme,” Viljoen said.
He added: “The [fund] raise demonstrates the strong support that Andrada has from its existing shareholders and other investors.
“The proceeds are to be used for ongoing capital expansion programmes related to the lithium and tantalum development.
“In addition, the funds will be used for working capital purposes as Andrada progresses its exploration programme, and commences a lithium feasibility study, to further consolidate its competitive lithium advantage within the Erongo region of Namibia.”
Loan note funding
Andrada highlighted that issuing loan notes was deemed to be the least dilutive method for the company to achieve its objectives, adding that this was particularly important as it continues to finalise its project funding from the Development Bank of Namibia (DBN) and a fund managed by Orion Resource Partners.
The DBN funding is ring-fenced to be applied to the continuous improvement of current plant operations, and, the company expects to draw down either in late July or early August.
Separately, the Orion funding timeline has been extended amid negotiations with existing lenders.
Andrada said it expects that the loan note funding and the DBN facility should cover all its financing requirements for the next 15 to 18 months.
It also added that a process to seek an appropriate partner for lithium development is continuing, as planned, and talks with various interested parties are ongoing.
Each loan note package comprises £100,000 of worth of notes with a three-year maturity, convertible at 9.45p per share, along with share warrants (two warrants per £1) which are exercisable also at 9.45p at any time over a two-year period.
The loan notes carry interest at 12% per year, and, are not quoted in the market.
Andrada has the option to redeem the notes early, at a premium price.
The Orange Trust, owner of 15.62% of Andrada shares, is among the subscribers of loan notes taking up 40 units for a £4 million investment.