The Colombia-focused coal company secured the major investment through a two-part deal.
The $1 million strategic investment comprises $500,000 in equity-based funding in the form of a share placement at 10c per share, with the remaining $500,000 balance in the form of an unsecured loan note with a conversion price of 18c per share, representing a 260% premium to the last traded price of 5c.
The note will carry a coupon rate of 14% per annum, payable quarterly in arrears.
Coupons may be paid at the company’s discretion, in the form of shares, cash or a combination of the two, with any shares issued priced at a 5% discount to prevailing market prices.
Ascot executive chairman Andrew Caruso said Sedgman’s investment marked the beginning of a strategic relationship between the two companies.
The companies will work together to explore opportunities to grow their respective businesses in
Colombia and South America more generally.
“With capital availability in the mining sector being restricted, particularly at the junior end, Ascot’s success in securing another tranche of funding is testament to the quality of the Titiribi coal project,” Caruso said.
Funds raised will be directed towards continuing feasibility studies at the company’s flagship Titiribi coal project in Colombia, including a study of capital and operations options for the project, for expenses incurred for the acquisition of an interest in the Uraba concession last month and for general working capital requirements.
“As a market leader in the design, construction and operation of coal handling facilities worldwide, Sedgman’s investment provides an invaluable resource to ensure the Titiribi project reaches short-term production,” Caruso added.
Subsequent to the share placement and note issue, Sedgman will become Ascot’s largest shareholder with 13.8% and will nominate a director to the Ascot board.
Titiribi has an 8.1 million ton resource, classified as 5.2Mt measured, 0.7Mt indicated and 2.2Mt inferred.
A project economic study is underway and is expected to be completed by the end of the month.
