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It’s a very busy week for Pan Asia Metals (ASX:PAM), with the lithium and copper explorer scoring a four-year $35 million investment from a New York private equity firm at the same time as the company’s big rebrand push begins.
Pan Asia will soon become Flagship Minerals Limited – pending shareholder approval – in a bid to clear up “confusion regarding the company’s geographic focus.”
(The explorer is based in Thailand but has pushed further into Chile this year.)
The timing, Pan Asia Metals’ Managing Director Paul Lock today explained, works well. The $35M in equity funding from Global Emerging Markets (GEM) sets the explorer on the path to resource definition and prefeasibility studies at its Chilean copper (Rosario) and lithium (Tama Atacama) projects. Pairing that South American ramp-up with stronger clarity via a modern name change shapes as a nobrainer.
Tama Atacama was a key selling point to GEM’s investment, with the 1,600 square kilometre development spruiked as South America’s largest lithium brine project – a glamorous prospect should lithium prices eventually bounce back.
Of particular interest in regards to the Rosario copper-silver project is the fact it borders several world-class plays managed by Enami and Codelco.
The equity deal with GEM has been in the works for several months, Lock said.
Now that it’s confirmed, Pan Asia will be able to bolster its funds by issuing shares to the New York firm when needed. The sale will be on 15-day share price average.
Lock and Pan Asia will face only one major stopper as they drawdown from GEM through to 2028: Each of the first three are capped at $1.5 million each, with that limit expanding to $5 million for drawdowns four to six.
The last $15.5M is then fully available (so long as it doesn’t breach ASX laws).
Finally, Pan Asia will pay a 2% fee for the commitment, up to $700,000 in the next year.
As long as the company play around the agreement’s rules, Pan Asia (or potentially soon Flagship Minerals) will have quite the kitty to work with as it gets to work on its “transformative” next steps.
PAM dropped 1.56% today to sell at 6.3cps.
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