Australian Mines Limited (ASX:AUZ) has boosted its financial position through a $12 million investment agreement with a New York-based fund managed by Bergen Asset Management, LLC.
Bergen Global Opportunity Fund II, LLC will make an initial up-front investment of $4 million, followed by a second investment of $4 million, and, by mutual consent, a third of $4 million.
Interest-free convertible security
Each of these will be by way of an unsecured interest-free convertible security with a 24-month maturity
Australian Mines managing director Benjamin Bell said, “I am delighted to have attracted a significant investment in Australian Mines from a firm like Bergen, which has made a number of successful ASX investments over the years, alongside existing shareholders and management.
“The issue of these convertible securities reinforces the significant investment interest we have received out of the United States over the past 12 months.”
Fully funded for work program
Australian Mines remains fully-funded for the planned work program across its project portfolio and through to a final investment decision on its flagship Sconi Cobalt-Nickel-Scandium Project in Queensland.
Part proceeds of the convertible securities will also be allocated to completing the acquisition of the Flemington project in New South Wales on a 100% basis.
This acquisition forms part of an option agreement with Jervois Mining Limited (ASX:JRV).
Funds will also be used to complete the upcoming Flemington resource expansion drilling program.
Australian Mines intends Flemington to act as a second production source of cobalt, nickel and scandium to the Sconi project where a bankable feasibility study is nearing completion.
The funds will also allow the company to maintain the operation of its demonstration-scale processing plant in Perth.
Strengthened balance sheet
Bergen’s investment will strengthen Australian Mines’ balance sheet as it progresses through project finance discussions for the development of the Sconi project.
“The investment structure gives a flexible facility and minimises any dilution at current levels for Australian Mines’ shareholders,” Bell said.
“It also allows the flexibility to accelerate progress at our promising Flemington project and greenfields Thackaringa Cobalt Project in NSW in parallel to delivering our development program at Sconi.”
He said that pending a positive BFS and successful funding negotiations, the company planned to begin construction at Sconi in early 2019.
The investor is an investment fund focused on high growth publicly-traded investment opportunities, primarily outside of the United States.