Vango Mining Ltd (ASX:VAN) has secured a $10 million funding package from Collins St Value Fund (CSVF) to advance exploration and development at the flagship Marymia Gold Project in the Mid-West region of Western Australia.
Collins St Value Fund, which has regularly featured among the best performing Australian equity mandates in the country, will subscribe for convertible notes by paying $10 million to the company, in two tranches.
Use of funds
This strategic funding will primarily be utilised to continue to advance Vango’s extensive resource expansion drilling campaign and pre-mine planning at Marymia, where the company is planning to confirm a resource upgrade by the end of the first half of 2022.
Vango executive chairman Bruce McInnes said, “We are delighted to welcome Collins St Value Fund as a new strategic investor in Vango.
"This funding package will allow us to make significant value-enhancing gains at the Marymia Project, including an upgrade to the project’s substantial existing resource.
"Additionally, we see the funding as being on attractive terms for the company and shareholders.”
Vango’s goal is to develop the Marymia project into a substantial long-term gold producing operation.
Two tranches
Tranche 1 of the CSVF package will be issued under Vango's existing capacity under ASX Listing Rule 7.1.
Tranche 2 will be issued subject to shareholder approval by Vango shareholders in accordance with the Corporations Act and ASX Listing Rules.
CSVF co-founder and chief investment officer Vas Piperoglou said: “We are proud to fund Vango via a friendly convertible note.
"With our current and further potential future funding, our team is extremely excited to help add and grow shareholder wealth via systematic value add initiatives to be conducted by the team at Vango.”
Funding package terms
Key terms of the funding package are:
- The company’s issue of convertible notes with a subscription value of $7.5 million and a face value of $9.075 million (an effective interest rate of 10% per annum), that may be converted by CSVF for a conversion price of $0.06 per company ordinary fully paid share into 151.25 million shares (Tranche 1); and
- At the company’s election which will be subject to the company’s future requirements for funds, within 12 months from the issue of Tranche 1 convertible notes and otherwise on the same terms as the Tranche 1 convertible notes, the company will issue additional convertible notes with a subscription value of $2.5 million and a face value of $3.025 million that may be converted by CSVF for a conversion price of $0.06 per share into 50.4 million shares (Tranche 2).
- CSVF may not convert any convertible notes if such conversion would cause it to hold a relevant interest in more than 20% of the total shares on issue.
- On the repayment date, which is two years after the issue of the Tranche 1 convertible notes, the company must redeem all Tranche 1 convertible notes not converted into shares before the repayment date by paying the outstanding face value of the convertible notes to CSVF.
- The terms of issue of the convertible notes and the security documents are otherwise on terms typical for a transaction of this nature.
- Immediately upon the subscription for Tranche 1 convertible notes, the company must pay to CSVF an establishment fee of 2.5% (being a fee of $187,500 offset against Tranche 1 funds of $7.5 million).
- To secure the funds advanced under the convertible notes, the company must grant the CSVF a first ranking security over assets of the company.
About Collins St Value Fund
Founded by Michael Goldberg and Vasilios Piperoglou, the Collins St Value Fund is a concentrated portfolio of the team's highest conviction ideas.
Having opened to the public in 2016, the fund has regularly featured among the best performing Australian equity mandates in the country.
Currently ranked No.1 by Morningstar in its category over 1, 3 and 5 years, the fund ranked No.1 across all Australian equity mandates by Mercer for 2020 and ranked 2nd for FY2021. More information on the Fund can be found at www.csvf.com.au.
About Marymia
The Marymia Project comprises 45 granted mining leases over an area of 325.08 square kilometres. It has an established high-grade resource of 1 million ounces at 3 g/t gold, underpinned by the Trident Deposit, whose resource is 410,000 ounces at 8 g/t, with immediate extensions open at depth/along strike.
Previous mining between 1992 and 2001 produced 580,000 ounces of gold almost entirely from open pits.
Vango is focused on growing its high-grade gold resource to support a proposed standalone gold mining and production operation at Marymia.
Watch: Vango Mining targets exploration program and mine planning with $10 million investor package