Frontier Resources Ltd. agreed to place A$6 million of shares to Forise Investment Sydney Pty. Ltd., a subsidiary of a large nonbank financial institution in China.
Forise Investment will subscribe for 375 million shares at 1.6 Australian cents apiece, with a 1-for-2 attaching option exercisable at 2.9 cents per share for two years.
Frontier Resources said its Dec. 22 release that the new shares represent 84% of its shares on issue upon completion and on a fully diluted basis.
The company's board will continue to serve until the placement is completed, after which Forise Investment's elected directors will be appointed.
As part of the deal, Forise Investment granted Frontier Resources a A$50,000 loan to cover near-term corporate and exploration costs, which may convert to shares at the same price upon completion of the placement.
Closing of the offering is subject to various conditions, including completion of an independent expert report and regulatory and shareholder approvals. Completion is anticipated by March 15, 2018.
Frontier Resources is focused on gold properties in Papua New Guinea, including the early stage Bulago property.