Aspire Mining Ltd (ASX:AKM) has received strong pre-commitments for the minimum placement condition needed to complete a $15 million strategic financing package and will increase the placement to $2.1 million.
Due to the strong demand, the board increased the raising from the initial figure of $1.7 million.
The conditional placement is priced at 2.1 cents per share and is on identical terms to the $10 million cornerstone placement to Mongolian national Tserenpuntsag Tserendamba.
Patersons Securities Limited acted as lead manager in respect of the $2.1 million placement.
Inclusive of the commitment from Mr Tserenpuntsag, the placement component of the raising now totals $12.1 million.
Settlement is conditional on shareholder approval and an Independent Experts Report opining that the cornerstone placement is either fair and reasonable or not fair but reasonable.
This placement, if approved by shareholders, will see Mr Tserenpuntsag become Aspire’s largest shareholder with a 27.4% stake and will increase the undiluted ownership held by Mongolian nationals to 32%.
The financing package will support Aspire’s new Ovoot Early Development Plan.
This provides for early production of washed coal from the company’s world-class Ovoot Coking Coal Project in northern Mongolia within 12 to 15 months of approval.
The company has identified a low ash high yielding open pit section of the Ovoot ore body, which is expected to be well suited to form the basis of a starter pit for the OEDP.
Debt to equity conversion
Aspire has also entered into an agreement with major shareholder, Noble Resources International Pte Ltd, for a debt to equity conversion of up to the existing debt of US$2.4 million plus accrued interest on that amount.
The residual balance of that debt is to be repaid out of funds raised from the strategic financing.
This will see Aspire emerge debt-free following completion of the financing.