Join our daily newsletter At The Bell to receive exclusive market insights
- Brightstar Resources (BTR) signs agreements to extinguish $6.03 million of debt that it owes to Stone Resources and Great Cortex International
- Through a revised agreement with Stone Resources, BTR won’t need to pay the $5.4 million debt it owes and instead will grant a 1.5 per cent net smelter royalty on six tenements
- Additionally, the company will no longer need to pay the $630,000 debt it owes to Great Cortex, as it will instead issue roughly 19.09 million shares at 3.3 cents per share
- Brightstar says these transactions will strengthen its balance sheet, meaning cash reserves and future equity can go towards exploration and project development
- BTR shares last traded at 1.8 cents on June 28
Brightstar Resources (BTR) has signed agreements to extinguish $6.03 million of debt that it owes to Stone Resources and Great Cortex International.
The company has $5.4 million worth of debt owed to Stone Resources (HK) (SRHK) and Stone Resources (SRL) which, under a debt and equity compromise agreement (DECA) announced in March 2020, was due to be paid in November 2023.
However, the parties have signed a deed of variation of the DECA which means that in exchange for extinguishing the $5.4 million payment, Brightstar will grant SRHK and SRL a 1.5 per cent net smelter royalty (NSR) on six tenements.
Total payments able to be made to SRHK under the new royalty is capped at $16.2 million.
Additionally, Brightstar has reached agreement with Great Cortex International to extinguish its debt of $630,000 in exchange for shares in BTR.
According to an original settlement deed announced in late September 2021, Brightstar was required to make a loan repayment of $630,000 in cash to GCI by November 18, 2023.
The parties have now agreed to settle the debt through a revised settlement deed by the issuance of roughly 19.09 million fully paid BTR shares at an issue price of 3.3 cents per share.
BTR Managing Director Bill Hobba said the company is pleased to have come to a resolution with Stone Resources and Great Cortex International.
“It is my belief that the extinguishment of the debt places Brightstar in a stronger position to progress our projects. The transactions will result in our balance sheet strengthening dramatically meaning that all existing cash reserves and future equity will be going into the ground,” Mr Hobba said.
Completion of these agreement is subject to shareholder approval which is expected in an extraordinary general meeting to be held in September.
BTR shares last traded at 1.8 cents on June 28.
