Top End Minerals Limited (ASX: TND) (“TND” or “the Company”) advises that it has secured the option to acquire an 85% interest in the Bawdwin Zn-Pb-Ag-Cu Mine lease in Myanmar (“Bawdwin Option”) with the payment of a US$1.5 million non-refundable deposit now made to Win Myint Mo Industries Co (“WMM”) (see ASX release dated 24 May 2017). The vendors have confirmed receipt of the funds.
Overview of the Bawdwin Zn- Pb-Ag-Cu Mine Lease and Option Terms
The Bawdwin Mine lease covers 38 km2 including the Bawdwin Mine and the Bawdwin Volcanic Complex. Bawdwin was a world-class mine when in production and was considered one of the richest mines in the British Empire before WW2. The “mining ‘reserve” reported in 1938 was 10.8 Mt at 14% Zn, 23% Pb, 1 % Cu and 670 g/t Ag (Khin Zaw, 1990). The mine was destroyed during WW2 but was re-opened in 1951 and was nationalised in 1963. Production fell progressively in subsequent years, reflecting depleted resources, lack of capital investment, and no investment in exploration.
In 1996, ASX-listed Mandalay Mining NL reported a Mineral Resource estimate under the JORC Code 1996 Edition (see TND ASX release dated 24 May 2017) which largely represented lower grade mineralisation around the historical high-grade stopes. If the 1996 Mineral Resource can be validated by additional drilling, the Bawdwin Mine may be one of the largest underdeveloped Zn-Pb-Ag-Cu deposits globally. However, TND cautions that a Competent Person has not done sufficient work to classify the 1996 estimate as a Mineral Resource in accordance with the JORC Code 2012 Edition. It is
uncertain that, following evaluation, it will be possible to report a Mineral Resource in accordance with the JORC Code 2012 Edition.
Bawdwin occurs in a volcanic complex that has never experienced systematic modern exploration and is also considered to have high potential for the discovery of additional high grade lodes.
Under the Bawdwin Option, TND is entitled to access the Bawdwin Mine lease during the option period to undertake such validation testing and exploration as the Company deems necessary leading to work programmes for the completion of feasibility studies on the project.
Acquisition of an interest in Bawdwin by TND is dependent on gaining all necessary Myanmar government approvals. WMM has an obligation to use its best endeavours to obtain all necessary government approvals required by TND to exercise the option.
New financing facilities secured
In order to meet the deadline for this Option payment (20 June 2017) and to fund the Company’s immediate cash requirements, new financing facilities have been secured by the Directors.
Yandal Investments Pty Limited, a company associated with Mr Mark Creasy and an existing financier to TND, has provided the Company with a Secured Convertible Loan facility to cover payment of the US$1.5 million option fee payable to secure the Bawdwin Project Option. The Bawdwin Project option fee was funded directly by Yandal Investments pursuant to the terms of the Convertible Loan on 19 June 2017.
The terms of the Convertible Loan are as follows:
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Principal US$1.5 million
Interest 10% pa
Secured Company’s Bawdwin Option
Fees $200,000 to be satisfied by the issue of 5,000,000 shares and 2,500,000 listed
options each to be issued pursuant to shareholder approval (if required). In the
event the shareholder approval is not obtained the fee will be payable in cash.
Term 12 months. Yandal has the right to request repayment at any time before that date.
Such request may be declined by the Company if the board of directors believe that
the repayment would cause, or would be reasonably likely to cause, an insolvency
event for the Company
Use of Funds Payment of Bawdwin Option fee
Convertibility The Lender may elect to convert the amount owing under the Convertible Loan into
shares at $0.04 per share.
A short-term Bridging Facility has also been obtained from PigEquity Pty Limited. The Bridging Facility is
for $100,000 and was funded on 26 June 2017. The terms of the Facility are as follows:
Interest 10% pa
Term The first to occur of a capital raising for a minimum of $2 million (excluding the
Yandal Convertible Loan) or 31 December 2017
Use of Funds Working capital
Convertibility In the event of default, the Lender may require the Company to convert the amount
owing into shares at $0.02 per share, subject to shareholder approval (if required).
As reported to shareholders on 21 June 2017, The Company requested a voluntary suspension of trading
of its securities pending an announcement regarding a material capital raising. To complete the capital
raising as planned, the new Board will be required to complete technical and financial due diligence and
prepare a prospectus in accordance with section 713 of the Corporations Act. This process has now
The Board is very encouraged by TND’s prospects in Myanmar and believes the securing of the Bawdwin
Option is a key milestone. The Board is grateful for the funding support of Yandal Investments and
PigEquity respectively. Further updates will be provided to shareholders in due course