Legacy Iron Ore strengthens cash reserves with $1m in interim funding

Legacy Iron Ore (ASX: LCY) is well funded to continue aggressive drilling programs at Mt Bevan where the company is eyeing an upgrade to the Inferred JORC Resource of 617 million tonnes at 32.1% iron.

Legacy Iron has now entered into two short term funding agreements with two funds separately managed by founders of SpringTree Global Investors, LLC, the New York investment firm that is currently funding Legacy.

The investors have agreed to provide $500,000 each in funding for a total of $1,000,000, which will be settled this week.

The interim funding is ahead of a proposed $18.9 million capital injection should shareholders approve the placement to National Mineral Development Corporation Limited at an EGM on 16 December 2011.


Terms of the agreement

- The amount funded will be interest free and unsecured against the company’s assets, with a $25,000 fee to be payable in shares;
- The amount funded is to be secured against 2,250,000 shares of Legacy;
- 1,000,000 unlisted options exercisable at a price equal to 110% of the average of the daily VWAPs per Share during the ten consecutive trading days immediately prior to the Execution Date, and expiring at a date which is 36 months from the date of execution of the agreement.


Conversion

The amount funded will be convertible into Legacy’s shares at the lesser of:

- 130% of the average of the daily VWAPs per share during the twenty consecutive Trading Days immediately prior to the Execution Date; or
- 90% of the average of five daily VWAPs per share during a specified period immediately prior to the relevant conversion notice date.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/22855/legacy-iron-ore-strengthens-cash-reserves-with-1m-in-interim-funding--22855.html