The Africa-focused explorer told investors that the coming months are “expected to be transformational for Alecto” and that the fundraise announced today would help to support the business during the period.
If not converted into Alecto shares, the notes are repayable by 2 December 2017 and carry an interest rate of 20%.
Interest payments will be satisfied through the issue of new Alecto shares at 0.06625p, which will result in 241.5mln shares being issued to the holders of the notes.
Instead of waiting to be paid back, the holders may opt to convert some or all of their notes into ALO shares during a 10-day period after the firm’s shares are readmitted to AIM - the shares are currently suspended at 0.07p.
The closing price of Alecto shares on the day they are readmitted will set an upper limit on the price at which the shares can be converted, while note holders may opt to convert the shares at 80% of the previous day's closing mid-market price if that is lower.
"We are pleased to secure this additional CLN facility which, together with the revenue currently being generated at the Mowana copper mine from ongoing copper concentrate production, will go towards fulfilling the mine's working capital requirements ahead of effecting the first phase of our full scale production plan at Mowana,” said chief executive Mark Jones.
“The coming months are expected to be transformational for Alecto and this CLN will support us while we drive our business forward.”
AIM re-admission by end of the month
In the same stock market announcement, Alecto told investors that it expects its shares – which have been suspended since the end of 2016 – to be readmitted to AIM by the end of June.
In order to achieve that, the company needs to complete the reverse takeover of Cradle Arc Investments, owner of the Mowana mine, which it says it is progressing.
Mowana production update
CEO Jones also gave a brief update on the operational performance of the mine, which is currently in the process of ramping up to full production capacity.
As noted last month, Jones said Mowana was still on track deliver production of 12,000 tonnes of copper concentrate in the third quarter of this year.