Bass Metals raises A$4.3m for Hellyer Mine from first tranche of fundraising

Bass Metals (ASX: BSM) has raised a total of $4.3 million from its first tranche of fundraising to assist with the development of the Hellyer Mine operation located in Tasmania.

The funds were raised through the issue of 3.3 million convertible notes and $1 million of loan notes. Each convertible note and loan note has a face value of $1.00, a conversion price of $0.15 per share and a free attached option.

The attached option issue and the convertibility of the loan notes is subject to shareholder approval at a general meeting to be held shortly.

Bass Metals has also received a number of proposals for the provision of debt and/or equity support, in a proposed second tranche financing.

The company has retained Gresham Advisory Partners and Helmsec Global Capital to assist in evaluating and negotiating those proposals.

Bass Metals anticipates being able to provide an update on the second tranche of the fundraising by 24 August 2011.

The second tranche will fund a short-term working capital deficit largely associated with the Hellyer Mine Project, maintain a more comfortable working capital position and provide adequate funding to sustain a large scale exploration and feasibility study program.

RMB Australia Holdings has not requested advancing the scheduled repayments of the outstanding $13.6 million debt which is due to be fully repaid by 31 December 2012.

The Hellyer Mine operation is running as planned with a smooth start to the fifth milling campaign on the 1 August, 2011 and resultant lead and zinc concentrate already stockpiled and ready for trucking to Burnie Port.

The notes have the following key terms and conditions:

- Each $1.00 convertible note will convert into 6.667 shares at a conversion price of $0.15 per share.

- The convertible notes bear interest at the rate of 11% per annum payable quarterly in advance or at the rate consistent with the interest rate on any tranche two convertible note issue occurring within 3 months from the date of issue of the convertible notes if the Tranche 2 coupon rate is greater than 12.1%.

- The convertible notes have a maturity date three years from the date of issue.

- Unless converted or redeemed before the maturity date, the convertible notes must be redeemed in full on the maturity date.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/18452/bass-metals-raises-a43m-for-hellyer-mine-from-first-tranche-of-fundraising-18452.html