Metals Exploration borrowing $2m to pay senior lenders

Natural resources exploration and development company Metals Exploration is borrowing $2m from its two largest shareholders to facilitate a $2.1m payment due to its senior lenders due today.

It had signed an unsecured loan agreement to borrow $2m from shareholders Runruno Holdings Ltd and MTL (Luxembourg) Sarl. Runruno would loan it $577,000, and MTL would loan it $1.423m.

The interest rate was 20% from the date of drawdown until 31 August 2017. There was a penalty interest rate of 30% from 1 September 2017.

"The repayment date is effectively the date when drawdown occurs of funds provided from a larger debt facility which is intended to be provided by a mezzanine debt provider by 30 June 2017," the company said.

"The proceeds of the loan will be used to facilitate a payment to the Group's senior lenders of $2.1m falling due on 31 May 2017," said Metals Exploration.

At 13:27 BST, shares in AIM-quoted Metals Exploration were up 6.48% to 2.88p each.