Gulf Manganese has secured around A$15m ($11.76m) to finance the construction and commissioning of the first two smelters at the Kupang Smelting Facility in Indonesia.
The funding was secured in a round led by Indonesia-based investment group PT Jayatama Tekno Sejahtera (PT JTS), which is set to receive a convertible note worth A$6m ($4.7m) with 0% interest.
The convertible note is slated to be converted into 25.1% of the equity of PT Gulf and is subject to the fulfilment of certain conditions.
In addition, the financing package includes a provision for an additional A$7m ($5.49m) standby facility if required.
The standby facility option can be exercised at any time during the construction and commissioning phase under the deal.
Gulf Manganese managing director Hamish Bohannan said: “PT JTS completed a very thorough and extensive due diligence process, and its willingness to invest in Gulf is a strong validation of our near-term plans and future vision for the establishment of this regionally significant manganese smelting facility in West Timor.
“With all relevant approvals and funding now in place, and our first two smelters expected to arrive on site during March, we are entering a very exciting period where we expect considerable shareholder value to be unlocked over coming months.”
Gulf has also issued a A$2m ($1.56m), five-year zero coupon converting note to Eighteen Blue Investments.
Approximately 133,333,333 converting notes have been issued at a face value of 1.5¢ each and the company expects to issue a further 133,333,333 free attaching listed options (GMCO), which will expire in April next year.
Gulf intends to begin ferromanganese alloy production by the middle of this year, with initial output set to be around 30,000t per annum.