Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Junior gold miner Nagambie Resources (NAG) has tapped investors for a neat $2.6 million through a placement of convertible notes
  • Sophisticated and professional investors have subscribed for the notes, which have a five-year term and a face value of 10 cents each
  • This 10-cent price represents a 23.5 per cent premium to Nagambie’s last closing price of 8.1 cents and a whopping 49.3 per cent premium to NAG’s 20-day volume-weighted average price
  • Convertible notes act as a form of short-term debt that converts into equity at a later date
  • In Nagambie’s case, the funding arrangement comes with a 10-per-cent-per-year interest rate that the company must pay in cash every six months
  • Nagambie said the funding will be added to its working capital to better position the company to advance its various exploration projects
  • Shares in Nagambie are trading grey this afternoon at 8.1 cents each

Junior gold miner Nagambie Resources (NAG) has tapped investors for a neat $2.6 million through a placement of convertible notes.

Nagambie told shareholders today it has received subscriptions for the Series 9 notes from sophisticated and professional investors. The notes have a five-year term and a face value of 10 cents each.

Convertible notes act as a form of short-term debt that converts into equity at a later date.

Essentially, the investor lends the required funding to the investee, but instead of being repaid in a typical cash-plus-interest scheme, the loan is repaid via equity in the company.

In Nagambie’s case, the sophisticated and professional investors have given the $2.6 million to the company in return for the notes, which the investors can convert into NAG securities worth 10 cents each at any point in the next five years.

This 10-cent price represents a 23.5 per cent premium to Nagambie’s last closing price of 8.1 cents per share and a whopping 49.3 per cent premium to NAG’s 20-day volume-weighted average price.

The investment deal comes with a 10-per-cent-per-year interest rate that Nagambie will need to pay in cash every six months.

Nagambie said the funding will be added to its working capital to better position the company to advance its various exploration projects.

NAG holds 3600 square kilometres of exploration licences in Central Victoria, along with various tenements for mineral exploration work. However, these tenements require Nagambie to spend a designated amount of money on exploration in the area.

To meet some of its requirements, Nagambie plans to spend just under $1.3 million on exploration work before the end of 2021, with around $1.1 million to be spent per year after this.

Shares in Nagambie Resources dipped slightly in early action today but, by 1:53 pm AEDT, the company has recouped its losses to trade grey at 8.1 cents. Nagambie has a $41 million market cap.

NAG by the numbers
More From The Market Herald

" Chalice Mining (ASX:CHN) maintains strong focus on top-tier Gonneville deposit

ASX 200-listed Chalice Mining (ASX:CHN) has had a rocky day on the ASX following the release…
White Cliff Minerals (ASX:WCN) - Technical Director, Ed Mead

" White Cliff Minerals (ASX:WCN) completes Cracker Jack drilling

White Cliff Minerals (ASX:WCN) has completed reverse circulation drilling at the Cracker Jack prospect within its…
Dreadnought Resources (ASX:DRE) - Managing Director, Dean Tuck

" Dreadnought Resources (ASX:DRE) reports delays in results as activity ramps up

Dreadnought Resources (ASX:DRE) said certain results have been delayed until February due to industry-wide obstructions.

" Antilles Gold (ASX:AAU) establishes maiden mineral resource estimate

Antilles Gold (ASX:AAU) announced the company has established the Maiden Mineral Resource Estimate (MRE) for its…