Newly-minted metals producer Symbol Mining (ASX: SL1) has secured up to US$3 million ($3.7 million) in additional funding to accelerate ongoing activities at its Macy zinc-lead operation in Nigeria.
The money will be used for working capital requirements during the ramp-up of Macy’s ore shipments as well as regional exploration activities at the Imperial and Tawny projects.
The funds will come from an extended short-term loan facility provided by Noble Resources International earlier this year, increasing Symbol’s limit from approximately US$3 million to US$5 million and providing an extra US$2 million.
The loan facility was part of an offtake and marketing agreement signed in July for the shipment of high-grade zinc and lead from Macy, which commenced this quarter.
Under the revised loan terms, Symbol’s repayment dates for each drawdown have been extended by three months and the final maturity date extended to September 2019.
Partial rights granted to Noble under the original offtake agreement to market saleable product for the life of mine will be increased to reflect the extension.
Symbol has also agreed to enter into a hedging facility agreement for up to 40% of saleable product.
Convertible notes funding
The remainder of Symbol’s funding will be generated from a terms sheet entered into with an undisclosed US-based investment firm for $1 million of amortising convertible notes with a face value of $1.1 million.
The unsecured notes will be provided in two tranches and can be converted for $0.025 per share, representing a 25% premium to the prevailing market price.
They have a 12-month term and are repayable in cash with a 10% premium to the face value, or in shares at a 10% discount to the volume weighted average price.
Symbol chief executive officer Tim Wither said the additional funding combined with Macy revenue puts the company on a solid financial footing.
“We now have the funding required for our planned activities, without the need to undertake an additional capital raising,” he said.
“We are pleased to have achieved this milestone and greatly appreciate the continued support from Noble and from our new investors who have confidence in our future success.”
Macy is Symbol’s flagship deposit within the greater Imperial project, which comprises 500 square kilometres of exploration leases believed to contain world-class zinc grades in Nigeria’s Upper Benue Trough.
Imperial is a joint venture between Symbol (60% equity) and Nigeria’s Goidel Resources (40%).
Macy holds an indicated and inferred resource of 132,700 tonnes at 18.3% zinc and 2.1% lead, with 85% in the indicated category.
A scoping study in May reported highly-encouraging results which demonstrated the viability of a traditional open pit mining operation and paved the way for the start of full-scale mining in July.
Mining at Macy is expected to generate strong cash flow to fund Symbol’s exploration activities at Imperial and Tawny, where the company currently holds one exploration lease covering 7sqkm.
Tawny is also highly-prospective for lead and zinc and is being pursued in 60:40 joint venture with Adudu Farms Nigeria.
At midday, shares in Symbol Mining were trading 10.53% higher at $0.021.