Ann: Early Works Expansion Funding ahead of BFS, page-15

No equity has been issued on this transaction.

The conversion price has been set at a premium to the current share price, and the equity, if/when issued will be at 6.5c per share regardless of what the future share price is.

A convertible note is a hybrid instrument. It currently has a weighting towards its debt component i.e. no new shares have been issued and interest is accruing at 7% p.a. The interest will either be paid or capitalised to the debt.

At expiry, the convertible note (plus any capitalised interest) can be repaid in cash i.e. the debt is repaid and no new shares are issued, or it can be repaid by conversion to new shares, issued at 6.5c at any time between now and September 2023.

The convertible note is certainly less dilutive if management successfully execute on the project, but it will be highly costly if they stuff it up as the rights of a lender is superior to the rights of a shareholder when things go bad.