Fratelli Investments, the major shareholder of Serabi Gold PLC (LON:SRB, TSE:SBI), has exercised its right to convert an existing US$2mln loan into Serabi shares.
The shares have been converted at a price of 4.5p each, resulting in 42.3mln new shares being issued to Fratelli, taking its stake in the Brazil-focused gold mining and development company up to 55.3%.
"Fratelli continues to be a very strong supporter of the company. Fratelli made this loan available at the end of last year when in common with all gold producers, the company was being faced with a sustained period of a falling gold price, and continuing commitments to increase the throughput capacity of the process plant as well as development expenditure to bring the Sao Chico Mine into full production,” explained Mike Hodgson.
"Whilst we have always planned our cash flow to ensure we had funds available to repay this loan in 2017, with our existing loan from Sprott Resource Lending expected to be repaid by the end of 2016 and with this convertible loan obligation now also settled, we will be entering 2017 as a company free of any long term borrowing and able to apply our cash flow to growth and building value," Hodgson added.