First Bauxite Corporation says it has entered into a binding commitment letter with Resource Capital Fund V L.P. (RCF) for a two-tranche convertible loan facility of up to US$28 million, which would be used to fund its works here at Bonasika on the Essequibo River.
“The facility would be used primarily to fund further development work including detailed engineering, reserve definition, equipment procurement and such further work as may be required to secure bank financing and final permitting over the known refractory-grade bauxite deposits in the Bonasika Mining Licence and the Waratilla-Cartwright Prospecting Licence in Guyana”, the company said in a recent press release.
It said that the proposed facility will comprise a first tranche of US$8M principal amount of unsecured convertible notes, which notes would be convertible into common shares of the company at a conversion price of C$0.83. Upon completion of certain conditions precedent, RCF will have an option to make an additional US$20M investment to subscribe for additional convertible notes in the aggregate principal amount of US$20 million. A number of conditions were cited.
“The First Bauxite team is executing its strategy of becoming a significant new producer in the sintered refractory bauxite industry. Securing this level of investment is a strong expression of confidence in our business model, future product and current resources. This facility allows us to maintain momentum and pursue our plans in the short and medium time framework. Resource Capital Funds are private equity funds supporting mining companies throughout the globe across a diversified range of mineral commodities inclusive of industrial minerals, and run by highly experienced professionals. Following the necessary approvals by the Exchange and our shareholders, the execution of definitive agreements and the closing of this financing, Resource Capital Funds will hold a significant part of the issued capital of the Company. We are very pleased to have the financial support of this major resource group and we will welcome their nominee on our Board”, Yannis Tsitos, President of First Bauxite was quoted as saying.
First Bauxite controls a large land package in Guyana’s historical coastal bauxite belt, including the Bonasika Mining License and the Waratilla-Cartwright Prospecting License, covering deposits which were drilled in 1940’s-60’s by ALCAN and which host near surface deposits of refractory grade bauxite.
