Herencia secures short-term funding as Next deal 'progresses well'
Herencia Resources has secured up to $0.5m of emergency funding from two shareholders that could keep it running until June, by which time it hopes to have completed the sale of its Picachos project for up to $5.13m to Next Minerals.
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AIM-listed Herencia said New York-based Lind Partners's Australian Special Opportunity Fund and Oriental Darius will supply £250,000 apiece in two tranches.
Tranche 1 of $200,000 will be paid as a convertible loan, which will require Herencia to repay $240,000 over the 24 month term, or will be converted into shares at a nominal price.
The security will be released if the company receives the first payment of $2m from the proposed Next deal, which would render the second tranche of $300,000 unnecessary.
On drawdown of the first tranche, each shareholder will have the right, but not obligation, to appoint one board member.
If the second tranche is drawn down, and as is possible with the first, is converted to equity, Oriental Darius would own a 36.25% stake in the company.
The process of selling the Picachos project to Next, announced in early February, is "well advanced", with due diligence "progressing well", with Herencia expecting the first payment of $2m by 30 April 2016 "if the transaction is to proceed".
Shares in Herencia were up 38% to a three-month high of 0.062p by 1345 BST on Tuesday.