Key points
- Neometals has not received $5M from Omaha Value Holdings, Inc. under Tranche 2 Placement
- Neometals has entered into a binding term sheet with Coal Holdings Pty Ltd for a standby debt facility of up to $2M
- Drawdown under the Facility is subject to satisfaction or waiver of the applicable conditions precedent
- Convertible notes may be issued to CHPL to satisfy all or part of the amount outstanding under the Facility
Full summary
Neometals Ltd (ASX: NMT) has not received the $5 million subscription monies owed by Omaha Value Holdings, Inc. under Tranche 2 of the placement, nor the $2.5 million guaranteed by Mr. Michael S. Luther. Neometals has entered into a binding term sheet with Coal Holdings Pty Ltd (CHPL), a company owned by former Neometals Chairman David Reed, for a standby debt facility of up to $2 million. The facility is intended to support Neometals' working capital requirements due to the non-receipt of the Omaha subscription monies. The drawdown under the facility is subject to satisfaction or waiver of the applicable conditions precedent. The facility bears interest at 10% per annum, payable monthly in arrears, with a 3% per annum fee on any undrawn balance. Neometals will reimburse CHPL's reasonable legal and transaction costs incurred in connection with the facility. The facility is secured by a first-ranking mortgage over Neometals' shareholding in Avanti Exploration Pty Ltd. Subject to shareholder approval and other required approvals, either Neometals or CHPL may require the issue of secured convertible notes to CHPL in satisfaction of all or part of the amount outstanding under the facility. The notes will be issued at a face value of $1.00 per note, bear interest at 10% per annum payable monthly in arrears, and be secured under the same form of security as provided in connection with the facility. CHPL may elect to convert the convertible notes into fully paid ordinary shares in Neometals at a conversion price of $0.025 per share, provided that the notes may only be issued in an amount that would not result in CHPL and its associates holding more than 20% of Neometals' issued share capital.
Guidance
Neometals Ltd has not received $5M from Omaha under Tranche 2 Placement
Outlook
Neometals Ltd has secured a $2M standby debt facility with Coal Holdings Pty Ltd to support working capital requirements.