Lumina Gold (TSXV: LUM) has substantially reduced current debt on its balance sheet following a transaction with Ross Beaty, a major shareholder of the company.
It was revealed last night via an early warning report that Beaty had elected to convert $15.3 million in outstanding debt to common shares of the issuer. The transaction has resulted in Beaty receiving 38,484,604 common shares at a price of $0.42, while his position in the company expanded from 20.78% to 27.99% on a partially diluted basis.
The debt owed to Beaty relates to a $10 million unsecured credit facility initially issued in July 2022, which contained an interest rate of 10%, and was due to mature on July 5, 2023. The debt deal was then amended in December, increasing the total loan to $15 million, while pushing out maturity to December 31, 2023, and adding a conversion feature. Funds from the loan were used by Lumina for pre-feasibility study costs, along with general corporate and working capital purposes.
At the time of initial announcement, Marshall Koval, CEO of Lumina, had commented that “Recent events in global markets and Ecuador have made this an unfavorable time to seek conventional equity funding and we therefore view this as the best path to allow Pre-feasibility work to continue unimpeded.”
Following the transaction, Beaty owns 115.3 million shares of Lumina, in addition to 1.5 million stock options.
Lumina Gold last traded at $0.39 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
