I don't believe the capital raising is at a premium, but I...

I don't believe the capital raising is at a premium, but I believe it is a good deal for the company and shareholders.

It is a 2 year convertible note that will pay 7% interest p.a. and noteholders can convert to equity at 6.5c anytime over the next 2 years. The communication doesn't specify whether the noteholders MUST convert to equity, or whether the debt can be repaid.

If the company goes well over the next two years, it will have put this funding and additional debt funding into capex and generated earnings well in excess of meeting opex (including the interest expense) and have a share price well above 6.5c. Say the share price gets to 10c or 15c, the noteholders will get to convert at that time at a discount to what you can buy on-market.

Conversely, if the company doesn't go well in the next 2 years and the share price is below 6.5c, the company may need to raise capital or utilise free cash flow to repay debt.