Marengo Mining has entered a convertible notes agreement with its major shareholder to raise $US15 million.
The ASX and TSX-listed Marengo announced today it had entered a binding term sheet with major shareholder Sentient Global Resources Fund for a non-brokered placement of convertible notes.
Sentient will have the option to turn the notes into ordinary shares at a conversion price of $C0.11 ($0.11) per share, while the debentures will mature on June 30, 2016.
The notes will bear an interest rate of 9 per cent per year.
Marengo was initially seeking to raise $US18.8 million through the placement, but announced today it had revised the agreement to $US15 million.
The financing package will be completed in two tranches, with $US9 million in notes to be issued on May 3, and the remaining $US6 million subject to shareholder approval.
The placement remains subject to Toronto Stock Exchange approval.
Sentient currently holds a 22 per cent stake in Marengo, and would up its interest to 39 per cent if it converts all of the notes issued through the placement.
Marengo said the funds would be used to develop its flagship Yandera project in Papua New Guinea and to boost general working capital
The project covers 1,790 square kilometres in the highly prospective New Guinea copper-gold belt.
At 11:40AM, WST, Marengo shares were 1.2 per cent higher, at 8.2 cents.
