One World Lithium Inc (CSE:OLWI) (OTCMKTS:OWRDF) has told investors it is replacing its previously announced non-brokered private placement with a new placing of unsecured convertible notes to raise up to C$1 million.
The non-brokered private placement, announced on September 5, was planned to see up to 10 million units at C$0.15 each for gross proceeds of up to C$1.5 million.
The net proceeds of the latest offering have been allocated to the continuation of Phase III drilling at the Salar del Diablo lithium project (C$400,000); analysis and further testing of drill results (C$200,000); investor relations (C$100,000) and the remainder for working capital.
The principal of this latest financing will accrue interest at 8% a year, said One World Lithium, and any accrued but unpaid interest will mature one year following closing.
Before that though, the principal and any interest may be convertible into units of the company at a price of $0.15 each.
Each unit consists of one common share and one non-transferable share purchase warrant, which entitles the holder to buy one further share at $0.20 each for 24 months from closing.
All securities are subject to a hold period for four months and one day from closing.
If the shares have a closing price on the Canadian Securities Exchange of greater than $0.40 for 20 consecutive trading days as well as trade an average of 100,000 shares a day, One World may repay all of the principal, together with all the accrued interest by giving written notice to the holders.
If the loan and interest is paid out, the holder will receive “bonus warrants” as to the same number of warrants the holder would have had if they converted.
This offering is subject to a minimum investment of C$5,000, there is no minimum aggregate proceeds required to close the offering, and the company may, at its discretion, elect to close the offering in one or more tranches, it said.
One World Lithium currently has earned a 60% interest with an option to acquire a further 30% property interest for a total of a 90% property interest in the Salar del Diablo lithium brine project, which lies in the State of Baja California, Mexico.
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