Andrada Mining (ATM.L) has officially announced that it has received the full amount of US$25M in funding from Orion Mine Finance, as previously agreed upon. The funding is comprised of a US$10M convertible loan, a US$2.5M equity investment, and a US$12.5M royalty on the production of its Uis mine, located in Namibia.
The royalty rate, initially at 5.13%, will decrease as the production rate increases. The royalty rate will be lowered to 4.50-3.61% if the annualized tin production increases to 1,600-2,000 tonnes per year, based on actual production numbers. The royalty financing will be used to increase tin production at Uis and the staggered royalty rate will ensure the company remains motivated to focus on production increases.
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In the current climate of high interest rates for African projects, it is not unreasonable for an unsecured convertible loan of US$10M to carry a 12% coupon. The loan note has a maturity of four years from the present date.
In recent news, the completion of a US$2.5 million equity investment has been announced. This was achieved through the issuance of 30.5 million new shares, each priced at 6.39 pence per share. This newly issued equity represents a fraction under 2% of the overall share count.
In news of recent financial activity, the loan note and equity investment funds will be allocated towards exploration efforts, with a particular emphasis on the Uis project and other lithium-rich assets. The metallurgical test work associated with these projects will be completed using these funds. Furthermore, the company is working diligently to perfect the tantalum circuit, ensuring that the tantalum production meets the specifications of AfriMet, the company’s offtake counterparty.
