Vanadium Resources Limited (ASX:VR8) has secured $783,000 through a convertible note issue to fund working capital and progress discussions with potential strategic equity investors for the Steelpoortdrift Vanadium Project. The funding consists of $495,000 from non-related party and sophisticated investors, $138,000 from corporate finance advisor GC Partners Asia as part settlement of advisory fees, and $150,000 from related parties, including $75,000 each from Executive Chairman Jurie Wessels and Non-Executive Director Michael Davy. The related-party participation is subject to shareholder approval.
The funds will be used for working capital, corporate finance advisory fees, and capital raising costs. This structure is designed to minimise shareholder dilution in the current market environment and is complemented by cost-reduction initiatives implemented in Q4 2024.
VR8 is continuing discussions with strategic equity investors, including tier-1 organisations with significant financial and technical capabilities. Several advanced negotiations are underway, with the company positioning itself for further investment as it progresses toward a final investment decision and project construction.
The convertible note terms include a 10% annual coupon, a maturity date of 12 August 2025, and a conversion price set at the lower of a 15% discount to the next capital raising price, a 15% discount to the 10-day VWAP at maturity, or A$0.06 per share. A floor price of A$0.015 per share applies.
Subject to shareholder approval, noteholders will receive 23,333 options per note, with an exercise price of $0.05 per share and a three-year expiry. This could result in the issuance of up to approximately 18.27 million options, depending on the total convertible notes issued.
Executive Chairman Jurie Wessels stated that the funding structure aims to protect shareholder value while allowing the company to continue pursuing strategic partnerships. “We are pleased to secure this funding in what remains a challenging market. This capital will allow us to continue ongoing discussions in relation to potential strategic equity investor interest and/or joint ventures.”
