North RiverResources Plc said June 28 that it plans to raise US$5.6 millionvia issuing new secured, conditionally convertible loan notes to GreenstoneResources LP.
The raised funds will be used to repay the 2015 convertibleloan notes issued to Greenstone, working capital purposes for the company'sshort-term work program, as well as ongoing planning for initiatingpre-construction work streams for its Namib lead-zinc project in Namibia.
In addition, the company plans to offer 12,317,359 shares inan open offer and placement to existing and new shareholders, priced at 23.75pence each, to redeem 70% of the loan notes being issued to Greenstone.
The remaining 30% of the notes will be converted to companyshares.
Upon completion of the capital raising, the company willhave additional net working capital of about US$2.5 million.
The company will also seek shareholder approval at a July 18meeting to consolidate existing shares to enable the financing proposals toproceed.
"Greenstone's subscription for $5.6 million of loannotes provides the company with certainty of funding from today, without whichit would need to commence drastic measures to reduce spending and more thanlikely enter into an insolvency process, which would almost certainly lead tothe loss of control over the company's principal asset, being the Namibproject," the company said in the statement.