Herencia Resources agrees $200,000 funding for 're-invigoration' strategy

Copper mining minnow Herencia Resources secured $200,000 from two shareholders to provide working capital and to fund its "re-invigoration" strategy.

After using most of the funds from the sale of its 70% ownership of the Paguanta Project to repay much of its debt, Herencia had been rather short of cash so has agreed to term sheets with two of its shareholders, the Australian Special Opportunity Fund and the Oriental Darius Co, for up to $200,000 in two equal tranches.

The first $100,000 tranche will be provided through a secured convertible facility worth a face value of $120,000 to be drawn down on or before Wednesday, with 0% interest over 24 months secured against the company's assets.

Subject to shareholders consent, the shareholders can convert any outstanding face value amounts into shares.

The second tranche can only be advanced by the shareholders and they will have the option to convert the second tranche’s funds into shares on the same terms as the first tranche.

In addition, the company will also issue the shareholders options equal to 100% of the total value of the second tranche’s face value of $100,000 and will be available for 36 months at 0.04 pence.

If Oriental Darius was to convert all its convertible interests in the company, it would hold 6.7bn shares representing 38.76% of the total issued share capital, while the Australian Special Opportunity Fund would hold 7.1bn shares representing 41.06%.

Announced at the start of September, Herencia's re-invigoration strategy has so far involved the repayment of most of its creditors and the hiring of former Ivanhoe Australia CEO Peter Reeve as a non-executive director to oversee the AIM company's "reestablishment as a viable junior exploration and development company".

Shares in Herencia Resources were down 9.09% to 0.0250p at 1010 BST.