Challenger Exploration (ASX: CEL) has entered into binding agreements for a US$15m (A$22.1m) private placement of unsecured convertible debentures with Queen’s Road Capital Investment Ltd (QRC).
The Debentures are convertible into fully paid ordinary shares in CEL at a price of $0.25, a 30% premium to the 5-day volume weighted average price (VWAP) prior to September 2, 2022.
Additionally, the company’s largest institutional shareholder has committed to invest pro-rata to its 12% shareholding via a $2.6m placement at 5-day VWAP, increasing combined funds raise to $24.7m from two parties.
Highlights
• Queen’s Road Capital to invest US$15m (~A$22.1m1 ) via unsecured Convertible Debentures
• Debentures convert into CEL shares at a price of $0.25 – a 30% premium to 5-day VWAP2
• QRC is well known as a long-term resource investor with a track record of successful investments
• Additionally, CEL’s largest shareholder commits to a $2.6m investment pro-rata to its 12% shareholding
• The combined $24.7m funding, which is expected to close on September 14, allows CEL to complete:
O a Scoping Study for the Hualilan Gold Project to be based on an updated Mineral Resource Estimate (MRE) incorporating the recently completed 204,000 metre drill programme
o 50,000 metres additional drilling at Hualilan which will likely result in a further MRE update
o an additional 25,000 metres drilling at the El Guaybo Project in Ecuador designed to allow the reporting of a maiden MRE on the main GY-A discovery zone at the El Guaybo Project, Ecuador
o an additional $2.6m discretionary spending which is yet to be allocated
“I am delighted to have QRC make an investment in CEL. QRC is a recognised long-term investor with a track record of successful investments in the resource sector,: Managing Director, Kris Knauer, said.
“QRC undertook extensive due diligence including a Hualilan site visit and their investment is an endorsement of CEL’s progress and potential. Our largest shareholder has been an active buyer on market and their pro-rata participation increases the amount raised to almost $25 million and extends our runway well into 2024.
“I am delighted to have QRC make an investment in CEL. QRC is a recognised long-term investor with a track record of successful investments in the resource sector. QRC undertook extensive due diligence including a Hualilan site visit and their investment is an endorsement of CEL’s progress and potential. Our largest shareholder has been an active buyer on market and their pro-rata participation increases the amount raised to almost $25 million and extends our runway well into 2024.
“It is a great outcome to achieve the funding required to complete this series of significant and value accretive milestones from a two long term investors, at a significant premium to a traditional placement and the current market price.”
For further information please visit: https://challengerex.com/
