Pure Minerals strengthens balance sheet to continue advancing Townsville Energy Chemicals Hub Project
Pure Minerals Ltd (ASX:PM1) has strengthened its balance sheet to maintain a robust financial position throughout the economic climate caused by COVID-19, allowing it to continue advancing the Townsville Energy Chemicals Hub Project (TECH).
The companys wholly-owned subsidiary Queensland Pacific Metals Pty Ltd (QPM) has entered into a facility agreement with Metamor Capital Partners for the provision of a short-term loan of up to A$587,000.
PM1 has also received a commitment to raise $320,000 gross of fees and will issue 32 million placement shares at a price of 1 cent per share.
Provision of R&D loan facility[hhmc]
The loan is based on PM1s and QPMs expected returns as part of the Federal Government's Research & Development Tax Incentive.
Much of QPMs historical and future expenditure on the TECH project is considered eligible expenditure under the Australian R&D Tax Incentive Scheme.
Cash expenditure contributed by QPM as part of the CRC-P project is also considered eligible expenditure, which means much of QPMs future development work on the TECH Project will be subsidised.
As part of the facility agreement, QPM will be able to borrow up to $586,728, drawn down in two tranches.
Repayment of this facility will be on the earlier of receipt of PM1s R&D Tax Incentive for financial year June 30 or November 15.
Standard-form cash loan[hhmc]
This facility is a standard-form cash loan with no conversion options and funds advanced under the facility are subject to an interest rate of 13.5% per annum.
The amount QPM can draw is based on incurred eligible R&D expenditure for the financial year ended June 30, with PM1 as guarantor under the facility agreement and the loan is secured against the assets of PM1.
The lender may terminate the agreement in the event of a default (such as a breach of a material provision of the facility agreement, an insolvency event, or other materially adverse event occurring).
In this event, the lender may require that all amounts advanced are immediately repayable, and any unpaid sums will incur additional default interest of 4%.
Equity capital raising[hhmc]
The placement is to an unrelated single overseas-based investor, Kwong Ho Richard Chan, and the company is pleased to receive such strong support from an investor with an experienced technical background.
Placement shares will be issued under the companyRead More – Source
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