Junior explorer Black Mountain Resources has agreed to pay $4.7 million in consultancy fees to a director’s company — almost as much as the entire company is worth.

The miner agreed to pay LB International, controlled by director Luca Bechis, for its advisory role in the purchase of a company owned by two other directors.

Black Mountain (ASX:BMZ) last traded at 3.1c, giving it a market cap of $5.1 million.

It made a loss of $8.8 million in 2017, on revenue of $1.2 million.

Black Mountain only restarted trading on Friday after it was suspended for not lodging its accounts.

Mr Bechis joined the miner in November last year.

In February last year Black Mountain agreed to buy shares in GLF Holdings from African Phosphate — a company controlled by Jason Brewer and Simon Grant –Rennick.

Mr Brewer resigned from the board in January this year, while Mr Grant-Rennick was appointed to the board in November 2016 and made interim chairman in July.

That deal was facilitated by Mr Bechis for which LB International is to receive $4.7 million and 28.5 million shares, giving him control over 18.6 per cent of the company.

The $4.7 million consists of $4.2 million payable as a deferred advisory fee, $329,000 for a capital investment fee, $163,000 for a working capital fee and $28,000 for a variation fee.

African Phosphate originally picked up 18,500,000 shares as a finder’s fee, or 12 per cent of Black Mountain.

It also earned a royalty of 1 per cent of future production revenue up to December 31, 2026.

That royalty was later reassigned to LB International as part of a $US750,000 ($964,000) bridging loan provided to Namekara Mining Company.

Black Mountain couldn’t afford to pay Mr Bechis’ company the full sum immediately — it’s almost four times the revenue it pulled in last year.

The initial $4.2 million advisory fee therefore is attracting a 5 per cent interest rate.

That deferred advisory fee is repayable at an amount equal to 66 per cent of the net cashflow after tax of Namekara Mining Company and Industrial Minerals International Corporation.

Costs incurred by LB International are being paid by Black Mountain as extra fees.

As of December 31, 2016 Black Mountain had not met the minimum capital investment commitment of $US2.5 million and as a result “raised a liability” of $274,721 — this was paid to LB International.

The company has been contacted for comment.