LONDON (ShareCast) - Premier African Minerals has agreed a £1.65m convertible loan facility with Darwin Strategic Limited in order to finish the construction of its RHA tungsten mine in Zimbabwe.
Giving details on Wednesday, Premier said the facility is for 66 loan notes worth £25,000 each to be repaid from October at the rate of seven per month. Eighteen of the notes will be issued immediately, with 30 next week and 18 at the start of June. Premier will receive £1,485,000 which is 90% of the par value.

Premier and Darwin have also entered into a put option over the former's 2m shares in Circum Minerals. The agreement is with George Roach, the chief executive of the group, at a price of $1 (£0.66) per share. If Premier defaults on the terms of the loan note, Roach will have to purchase the Circum shares for $2m with the proceeds used to settle all outstanding loan notes.

Investment bank Northland Capital Partners view the deal with Darwin as good because Premier has the potential to repay the debt and with this financing instrument there is no shareholder dilution. Another benefit is that there is also no risk of a default as the loan notes will be converted into shares, it added.

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