The promising gold explorer is announcing an interesting financing agreement today Nova Minerals (WKN A2H9WL / ASX NVA). The company announced that existing major shareholder Collins St Asset Management has agreed to provide the company with AUD 2 million in fresh capital immediately and up to an additional AUD 4 million if necessary. At the same time, Collins announced that it would exercise its entire portfolio of Nova Minerals options, so that the company would receive additional capital.
This money will be used to intensify drilling on the promising Nova Estelle gold project, where the company has already demonstrated a first inferred resource of 2.5 million ounces of gold. The company recently announced that the first well of the new program has been successfully completed and has the same type of mineralization that occurs in the known resource area. (We reported.) The samples from this borehole are already on their way to a laboratory in Alaska, so that the first results can be expected in the coming weeks.
The financing agreement
As previously said, Colins will provide AUD 2 million directly, which will be considered an advance payment with a face value of AUD 2.2 million. Nova has the right to repay this loan at any time within 120 days, with each payment being at least AUD 550,000 in this regard.
Should Nova not repay the loan within this period, Colins will be entitled to convert all or part of the outstanding face value of the loan into Nova Minerals shares at a price of AUD 0.07 per share.
If Colins does not exercise this right, the contracting parties have agreed to negotiate an alternative repayment method. As long as such is not decided, the part of the loan that is not repaid will be increased by 5% and must be paid by Nova through the monthly issue of shares (in equal parts) over a period of six months. The shares are issued at AUD 0.07 or at a 20% discount to the lowest five-day weighted average price of the previous month, whichever is lower.
The additional $ 4 million that Nova could use would be made available on terms negotiated by the companies.
Nova will also pay Collins 4.3 million shares and 18 million options for the asset manager to agree to the deal. The options have a term of two years and an exercise price of AUD 0.07.
Of course, this funding is watering down for Nova Minerals shareholders, but as Managing Director Avi Kimelman explained, the agreement with Collins among the many financing options is the deal with the least watering down and the best value for shareholders.
In any case, this cash injection gives the company scope to push ahead with its ambitious 2020 plans! Nova Minerals has repeatedly stated that it not only wants to significantly expand its previous resource of 2.5 million ounces of gold in 2020, but also plans to push the Korbel deposit into the feasibility phase and thus towards production.
Today’s news has definitely been well received on the Australian stock exchange. At the time of writing, the Nova Minerals stock was up 14% at AUD0.057 with a high trading volume of more than 16 million shares. Since GOLDINVEST.de first drew attention to Nova Minerals (in September 2018), the share has now been around 418% ahead.
Even though we continue to see excellent opportunities for Nova Minerals, we would like to point out to our readers – as is so often the case here – that exploration is a highly risky business – and in no way guarantees success. We will definitely keep you up to date.
In accordance with Section 34b WpHG and Section 48f Paragraph 5 BörseG (Austria), we would like to point out that clients, partners, authors and employees of GOLDINVEST Consulting GmbH can hold shares in Nova Minerals and that there is therefore a potential conflict of interest. We can also not rule out that other stock market letters, media or research companies will discuss the values we recommend in the same period. Therefore, symmetrical information and opinion generation can occur during this period. There is also a consulting or other service contract between a third party that is in the Nova Minerals warehouse and GOLDINVEST Consulting GmbH, which creates a conflict of interest, as this third party pays GOLDINVEST Consulting GmbH for reporting on Nova Minerals. This third party may also hold, sell or buy shares in Nova Minerals and would benefit from an increase in the shares of Nova Minerals. This is another, clear conflict of interest.
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