[Botswana] Giyani signs $1 million convertible loan facility and marketing agreement with Traxys
Canadian exploration company Giyani Metals Corp has entered into a non-binding term sheet with Traxys Africa Trading (Pty) Ltd which sets out terms for an investment of $1 million in the form of a secured convertible loan facility under which Traxys will have exclusive rights to market all of the direct shipping ore manganese material processed and produced from the Company’s K.Hill and Otse reclamation projects in Botswana.
Robin Birchall, CEO of the Company said. “We are very excited to be partnering with a global leader in metals marketing and trading like Traxys. These terms underline the shared vision we have with Traxys in terms of the importance and market potential of battery-grade manganese. We expect the completion of the definitive agreements and final approvals will occur expeditiously, and once established, we will be in a position to use the proceeds received from the convertible loan to implement the reclamation projects at K.Hill and Otse within the framework of the recently announced environmental management plans (EMPs) at both prospects.”
The convertible facility will also bear interest at a rate equal to the aggregate of 10% and the US Dollar LIBOR per annum compounded quarterly and will mature 36 months from the date that all conditions precedent to draw down have been satisfied.
The outstanding principal amount may be converted, in whole or in part, at the election of Traxys into common shares at a price per share equal to C$0.225. At the establishment of the convertible facility, Traxys will also receive 3,000,000 warrants all vesting immediately.
Each of the warrants will be exercisable into one common share for a period of 36 months from their date of issue and at an exercise price of C$0.225, subject to the approval of the TSXV.
Establishment of the convertible facility and issuance of the warrants is subject to completion of definitive convertible loan facility, security and warrant documentation, TSXV approval, and final Traxys and Giyani board approvals, and completion of satisfactory due diligence, all of which is expected to be completed on or before March 31, 2019.
Giyani intends to use the funds received from the convertible facility to finance the development and operation of K.Hill and Otse, and to implement the EMPs at those projects.