$3.5M in funding secured

Published 04-JAN-2023 14:00 P.M.

2 min read

Shares Held: 5,472,748

Options Held: 1,368,190

This morning our silver Investment Thomson Resources (ASX: TMZ) secured another funding facility from financier Lind Global Fund II.

The amount secured through the funding facility is for a total of $3.5M that TMZ can access over 12 months.

This follows from a previous agreement signed with Lind last August for ~$2.2M.

The funding facility is unique because every time TMZ draws down funds from the facility, Lind is issued TMZ shares based on a pre-determined VWAP formula.

At a very high level, it is an exchange of cash to TMZ and then TMZ shares to Lind.

The key terms of the funding facility are as follows:

Term of facility = 12 months with an option to extend for a further 12 months.
Amount available = $3.5M.
Initial drawdown = TMZ being extended a gross $400k ($288k net of fees) as the initial drawdown.
Monthly drawdowns = Lind can extend to TMZ $100k per month. TMZ can choose to reduce draw downs to $25k per month or increase them to $300k per month.

The share price that the monthly share issuances will occur will be at the lesser of the following:

3c per TMZ share.
90% of a 5-day volume weighted average price (VWAP) subject to a floor price of 1.8c per share.

If the share price is less than the floor price, TMZ will have the option to try and repay the amount in cash instead of through the issuance of shares.

We have seen this type of funding arrangement before and usually expect to see the monthly share issuances create some level of churn over the period of the funding facility. As a result, we think the TMZ share price could trade sideways, barring any major news that takes the company’s share price higher.

On that front, we still want to see TMZ achieve the important 100Moz silver equivalent metric, which was our #1 Objective for TMZ in our Investment Memo: