General Discussion, page-58

Great summary mate.


Im not an expert in convertible notes and have only used them once myself …. But it really comes down to how they are drafted (including trigger event/s, option to pay back in cash etc).

They can provide a lot of flexibility, though it’s usually for the benefit of the note holder.

You are 100% correct though, if they were to issue $100M odd in con notes on crappy terms, there is the real potential that if the trigger event/s occured with the SP still in the gutter, someone will essentially get $100M + interest worth of equity in the company (which would be over 50%).
Shareholders will then be royally screwed.

I would hope, that after the con notes are issued (assuming this is the route they go), they will have the BFS and major project funding sorted within months, with the option to pay the con notes + interest back in cash (drafted into the agreement) .

I would also anticipate the interest rate to be on the higher side, but It’ll be a small price to pay if they can do this correctly.

Quite an exciting time, we’ll find out if we’re sitting on multiples of our initial investments … or trying to flog off what we can at a loss, in the very near future.




Cheyne