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Diatreme Resources secures $3M funding for Cyclone Zircon Project


Diatreme Resources (ASX:DRX) has signed a $3 million convertible note facility with a private Chinese investor to advance its flagship Cyclone Zircon Project in Western Australia’s Eucla Basin.

This is key to advancing the definitive feasibility study for the project, which has a Resource of 211 million tonnes at 2.3% heavy minerals.

The $3 million facility can be drawn in $500,000 tranches over a 12-month period, with first drawdown due for late May 2015.

The notes have an attached coupon interest rate of 5.2% payable by half yearly instalments in arrears on the six month anniversary of each drawdown.

These have a term of 36 months from last note drawdown date, with provision for a further extension of 12 months at the request of the noteholder.

Half of the notes are convertible to ordinary shares at maturity at a fixed price of $0.02, or a 122% premium to its share price at the time of signing the agreement, while the rest will be redeemed at maturity.

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Quick facts: Diatreme Resources Ltd

Price: 0.012 AUD

Market: ASX
Market Cap: $17.57 m

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