Vendetta Mining Corp. (CVE:VTT) has bolstered its financial position to advance its Pegmont Lead Zinc project in Australia by striking a C$500,000 share subscription facility agreement with Scharfe Holdings for a 12-month term.
Under the deal’s terms, Vendetta is able to send a drawdown notice to Scharfe which details the number of units Scharfe has an obligation to take up. Each unit is made up of a common share and a warrant, which is exercisable for a period of three years and can be used to purchase a share at a strike price equal to a 30% premium to the price of units issued.
“We’re very pleased with the agreement announced today as the first of a series of important steps we’ll be taking in the coming weeks and months towards the re-payment of the Nebari loan and to achieve our other medium-term objectives at Pegmont”, said Michael Williams, Vendetta’s CEO, in a statement.
The subscription price per unit is equal to either a discount of 10% to the average closing price of Vendetta’s shares listed on the TSX Venture Exchange for ten straight trading days before the closing of the drawdown; or the lowest permissible per-unit price under TSX Venture Exchange policies, whichever is higher.
Proceeds from the arrangement will be used by Vendetta to make principal payments on its Nebari loan. The drawdown process can be repeated as often as Vendetta likes during the 12-month period until a maximum of C$500,000 has been taken up by Scharfe.
Scharfe will hold its Vendetta shares via a share-lending facility provided by Octavian Capital Corp. and Elysium Mining Limited, a pair of private companies controlled by Vendetta CEO Michael Williams and director Peter Voulgaris.
The Vancouver-based junior exploration company is taking a gamble that its open-pit Pegmont lead-zinc project in the Mount Isa-McArthur mineral area of Australia – which boasts hefty deposits of lead, zinc and silver, is set to become one of the world's most productive base-metal mines.