Noble Helium Limited (ASX:NHE) Secures US$2.5 Million in Convertible Notes
Funding Details
Noble Helium Limited (ASX:NHE) has entered into a Convertible Securities Agreement with Obsidian Global GP LLC to raise up to US$2.5 million. The initial drawdown is US$850,000, with subsequent tranches of up to US$1.65 million possible within the next 12 months, contingent on mutual agreement. The notes are issued interest-free and have a maturity of 36 months from drawdown, with a face value of US$1.15.
Conversion Terms
The convertible notes can be converted by Obsidian at a fixed price of A$0.10 or, after a set date in February 2025, at a variable price based on market performance. The variable price will not fall below A$0.03. The company maintains the right to repay the notes at any time with a 5% premium on the principal amount, provided a five-day written notice is given.
Use of Funds
Funds raised from the first tranche will be allocated to ongoing exploration activities, license renewals, and general working capital needs. The CEO, Mr Shaun Scott, expressed optimism regarding the partnership, stating, “We welcome the support of Obsidian and our decision to pursue a convertible note structure on good terms reflects our expectation of the upside ahead, when we are able to access and drill the shallow potential free gas caps identified at Mbelele and Kinambo in North Rukwa.” The flexibility of this structure gives us immediate access to capital while minimising dilution. We maintain the option to repay the note or allow conversion to equity based on the outcome that is in the best interest of the Company and shareholders. In conjunction with the existing At-The-Market facility, we now have a suite of funding options available.”
Compliance Update
Noble Helium confirms that the notes were negotiated with an independent investor and considers the agreement as a commercially viable solution for funding. The company has also received legal advice affirming that the terms are market standard.
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