Miner gets $1M bridge loan

Canadian miner MBMI Resources, Inc. has secured a $1-million loan from a European bank to fund nickel exploration projects in southern Luzon and eastern Visayas.

"[Global Capital Corp.] has advanced $1 million to MBMI in the form of a secured two-year convertible debenture," the miner told the Canadian bourse.

The loan, which has an interest rate of 10% per year, is the first tranche of a $3-million transaction arranged by MBMI.

The miner is exploring four nickel properties in Palawan, four in Samar, and one in Dinagat Island. MBMI and its local partners control nickel laterite projects covering about 22,000 hectares.

"MBMI’s objective is to become a major supplier of high-grade nickel material to primary industrial consumers in Asia," said MBMI President Michael T. Mason.

Nickel prices for cash buyers on Friday closed at $8.792 per pound, higher than the $6 per pound in the first quarter, data from the London Metal Exchange showed.

"MBMI has invested significant funds into infrastructure and the development of nickel projects over the last few years, and these funds will restart nickel material shipping operations," said Global Capital Chief Executive Jason Ewart.

The loans allow Global Capital to convert the debt to MBMI shares at a fixed conversion price of $0.10 per share. "As additional consideration for providing the bridge loan, Global Capital was issued 1.6 million common shares of MBMI at a deemed price of $0.0625 and paid a $10,000 structuring fee pursuant to the debenture," the miner said.

Global Capital is a European merchant bank that provides bridge loan services to companies engaged in oil and gas, mining, real estate, manufacturing, retail, and financial services.

MBMI and Global Capital plan to immediately close a second tranche under the loan agreement, which will see Global Capital advance up to $2 million, with MBMI issuing up to 3.2 million common shares. — Neil Jerome C. Morales, Business World

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