(Alliance News) - Alba Mineral Resources PLC said Monday it has secured up to GBP1.1 million of funding from US-based institutional investment fund Bergen Global Opportunity Fund LP.
The financing will be structured through the issue of zero-coupon, unsecured convertible securities issued by the mineral exploration firm, the initial tranche of which will be redeemable at a premium to the subscription price.
The securities will be issued in up to five tranches, with the first two having a purchase price of GBP192,000 each, the third of GBP153,000, and the final two a purchase price of GBP115,000.
The total funding amounts to GBP767,000, but can be raised to GBP1.1 million by mutual consent.
Bergen Global will have the right to convert the securities into Alba shares at either the volume weighted average price of shares during a specified five-day period before conversion, or 0.1625p each.
The financing has been structured to provide Alba will funding at regular intervals over the next 18 months, allowing the company to fund key value-enhancing work activities across its mining portfolio.
"This financing provides Alba with a significant funding source for the year ahead. In traditional private placements, placing shares are issued up-front and therefore the full dilutionary impact occurs on the closing of the placing," said Executive Chair George Frangeskides.
"By contrast, the structure of this financing package provides the company with an opportunity to increase its share price during the course of this year which, if successful, would mean that the shares would be issued at higher prices, resulting in less dilution for existing shareholders," Frangeskides added.
Shares in Alba were down 4.6% at 0.11 pence on Monday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Alba Mineral Resources (ALBA)