Aim-listed technology metals mining company Andrada Mining has successfully raised £7.7-million by issuing 77 unsecured, convertible loan notes worth £100 000 each to both new and existing investors.

The company has also provided the holders of the loan notes with two warrants for each £1 of note held, allowing them to subscribe for one ordinary share in the company.

“The [£7.7-million] raise demonstrates the strong support that Andrada has from its existing shareholders and other investors. The proceeds are to be used for ongoing capital expansion programmes related to the lithium and tantalum development.

“In addition, the funds will be used for working capital purposes as Andrada progresses its exploration programme and commences a lithium feasibility study, to further consolidate its competitive lithium advantage within the Erongo region of Namibia,” Andrada CEO Anthony Viljoen said on July 18.

In addition, Andrada has also announced that the construction phase for its bulk sampling plant and tantalum circuit has been completed. The commissioning process has begun as planned.

“The completion of the construction phase of the lithium bulk sampling facility is an important milestone for Andrada, as it allows the company to advance its . . . lithium expansion programme,” Viljoen said.

The decision to issue convertible loan notes stems from the company's belief that the completion of the lithium bulk sampling plant and tantalum circuit construction represent significant milestones towards becoming a producer of multiple technology metals.

The directors also view the loan notes as a financing option that minimises dilution, particularly while finalising funding arrangements with  financial institution Development Bank of Namibia (DBN) and a fund management firm Orion Resource Partners.

The funding from DBN is dedicated to continuous improvements in current plant operations. The directors expect that the DBN funding will be accessed by the end of July or early August.

Progress has been made in securing the Orion funding, although negotiations with existing lenders have led to a slight extension of the original timeline. With the £7.7-million raised through loan notes and the £4.4-million senior secured debt facility from DBN, the directors believe Andrada has sufficient funds to cover its financing requirements for the next 15 to 18 months.

Additional funding is necessary to maintain momentum in the company's work programmes and projects while other financing packages experience delays. The net proceeds from the loan notes will primarily be allocated to fund the commissioning of the bulk sampling plant and tantalum circuit, ongoing exploration efforts, metallurgical testing programmes, and working capital.

Further, these funds will enable the start of a lithium feasibility study, which is crucial for determining the detailed design of Andrada's next phase of growth.

“Andrada is well-positioned to be a significant supplier of technology metals globally and to be the first Aim-listed lithium producer,” Viljoen said.