Pan Asia Metals has unveiled a potentially transformative four-year $35 million equity facility with the New York-based private equity firm Global Emerging Markets (GEM). The funding secures the company’s future capital requirements under a flexible funding option to advance its flagship copper and lithium projects in Chile.
The company is also preparing to rebrand as Flagship Minerals, having noted the market’s confusion surrounding its geographic whereabouts.
It says the $35 million equity facility from the $3.4 billion investment group GEM will provide a pathway to resource definition and potentially pre-feasibility studies at its Rosario copper project in Chile and the extensive 1600 square kilometre Tama Atacama lithium project in the country’s renowned lithium brine region.
Pan Asia Metals has unveiled significant funding to progress its Chilean copper and lithium projects.
The capital agreement has been structured as a flexible equity investment, allowing Pan Asia to draw down funds by issuing shares to GEM whenever it deems appropriate and at whatever the 15-day share price average is at that time.
However, the company cannot draw down the entire $35m million out in one tranch. Management says over the next four years, the first three drawdowns will be capped at $1.5 million each, followed by three additional drawdowns of up to $5 million with the remaining $15.5 million subject to conditions, including that GEM not breach the 19.9 per cent ownership threshold governed by ASIC autocrats.
‘The facility provides PAM a pathway to resource definition & pre-feasibility at both the Rosario Copper and Tama Atacama Lithium projects’
Pan Asia Metals managing director Paul Lock
Pan Asia will also pay a two per cent fee to GEM for the capital commitment, equating to a total of $700,000 within the next 12 months, payable as either cash or shares at Pan Asia’s election. The 2 per cent fee compares favourably to traditional broker-led raises that can attract fees up to 6 per cent plus.
Pan Asia Metals managing director Paul Lock said: “We have been working on this Capital Commitment Agreement with GEM for several months and have found the GEM team constructive and collegiate. The facility provides PAM a pathway to resource definition and pre-feasibility at both the Rosario Copper and Tama Atacama Lithium projects, as well as working capital for the company’s other needs.”
Pan Asia only recently picked up its Rosario copper-silver project in the country’s Atacama region in October. Management says the project is significantly underexplored yet highly prospective for copper-silver mineralisation. It has the characteristics of “Manto-style” mineralisation - a potentially lucrative mineralisation type responsible for several 200 million tonne-plus discoveries grading more than one per cent copper throughout the northern parts of Chile, including the Mantos Blancos, El Solado and Michilla mines.