Ironbark Zinc set to pursue potential acquisitions with approval for US$50 million funding facility

Ironbark Zinc (ASX: IBG) has received shareholder approval to proceed with a US$50 million convertible note funding facility with Glencore International to pursue acquisition opportunities.

The facility has been struck by Ironbark managing director Jonathon Downes at a level that provides for conversions to shares at a significant premium to Ironbark’s last traded share price.

Downes said, “The current challenging market conditions make this unique funding facility very attractive, with conversion prices at $0.42 and $0.50 per share representing very attractive premiums to the current Ironbark share price.”

The funding facility could see Ironbark expand to become a significant base metals house with this further backing from Glencore.

Ironbark plans to use the funds to acquire assets, at either a project level or a company level, which are identified and agreed upon between Ironbark and Glencore, and for working capital.

The facility will be provided in two tranches of convertible notes with minimum drawdown amounts of US$5 million.

Tranche 1 comprises $30 million which may be converted into Ironbark shares at the election of either Glencore or Ironbark at A$0.42 per share, and tranche 2 comprises US$20 million which may be converted into Ironbark shares at the election of Glencore at A$0.50 per share.

Ironbark and Glencore will also enter into an offtake agreement for 35% of the production of concentrates from Ironbark’s Citronen Project in Greenland. If any amount is drawn down pursuant to the facility then the offtake agreement will increase to 55%.

The deal will also allow Ironbark to further strengthen its board, with Glencore having the right to request the addition of three of its representatives to the board if any convertible notes are issued.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23835/ironbark-zinc-set-to-pursue-potential-acquisitions-with-approval-for-us50-million-funding-facility-23835.html