LONDON (Alliance News) - Tengri Resources PLC Tuesday said it has raised funds by issuing a USD4.0 million unsecured loan note to Robust Resources Ltd, which owns an 87.3% stake in the mining exploration and development company.
The proceeds are to be used to complete the first phase feasibility study at its Taldybulak gold and copper project and the scoping study for the second phase of Taldybulak/Andash in the Kyrgyz Republic.
The loan note, which carries a coupon of 5% per annum and is to be repaid at the end of March 2018, can be converted into shares at 5 pence per share. Tengri shares were untraded on London's AIM market on Tuesday morning after closing at 3.25 pence on Thursday last week.
There are restrictions to converting the loan note, with one of those conditions meaning that Robust cannot increase its shareholding in Tengri to more than 87.3% by taking up its rights to shares under the arrangement.
Tengri said it consulted nominated adviser finnCap over the terms of the deal as a result of Robust's status as a "related party" due to its shareholding. The arrangement was deemed "fair and reasonable" by finnCap, the company said.
"The funds raised will provide Tengri with the means to accelerate development of the first Phase of the Taldybulak gold and copper project. Phase 1 is focusing on the near-surface, higher-grade gold section of the deposit and will evaluate a project with a modest capital outlay that has the potential to generate significant returns for shareholders," Chairman Peter Moss said in a statement.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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