Panoramic Resources Ltd's (ASX:PAN) major shareholder Zeta Resources Ltd (ASX:ZER) will provide an unsecured loan of $8 million to support activities at the Savannah Project and for working capital purposes.
Macquarie Bank Limited has provided consent, under the company’s existing Senior Secured Debt Facility, in connection with the Zeta Loan Facility.
The Senior Lender Consent contains customary terms, including restrictions on repayment of the Zeta Loan Facility ahead of Macquarie.
Panoramic's managing director and CEO Victor Rajasooriar said, “We are pleased to have the continuing support of our major shareholder, Zeta Resources, with the funding to be used to support activities at the Savannah Project and short-term working capital requirements, whilst we continue to pursue longer-term funding initiatives.
"The funds will also assist in navigating the dynamic environment associated with the COVID-19 pandemic on the company’s operations.”
Terms and conditions
Key terms of the loan are as follows:
- Principal amount of A$8.0 million;
- Interest rate of 6% per annum;
- The loan is unsecured and subordinated to the Macquarie Bank Limited Senior Facility;
- The loan has a maturity date of June 30 2022, unless repaid early; and
- Around $3.4 million of the loan principal shall be offset by the transfer of about 17.2 million Horizon Gold shares agreed to be sold by Panoramic to Zeta, if the Horizon Share Sale is approved by Panoramic shareholders.
Panoramic will issue options to Zeta or its nominee, subject to Panoramic shareholder approval and Zeta or its nominee obtaining FIRB approval as follows:
- If the Horizon Share Sale is approved by Panoramic shareholders: 28,520,525 options;
- If the Horizon Share Sale is not approved by Panoramic shareholders (such that the Horizon shares are retained by Panoramic): 50,000,000 options;
- Option expiry: 3 years from date of issue; and
- Option strike price:16 cents per Panoramic share.
Unless otherwise agreed, Panoramic will seek shareholder approval for the Horizon Share Sale and issue of options between June 1 and August 1, 2020.
If Panoramic shareholder approval for the issue of the options is not obtained, then Panoramic must make the following ‘make-whole’ payments to Zeta when the loan is repaid in full: