New Energy shares take a hit on $5.1m debt claim
New Energy Minerals has been handed a demand from a private financier to repay a $5.1 million debt — but the vanadium and graphite explorer is disputing how much it owes.
The demand was served by Arena Structured Private Investments, which holds convertible notes worth $2.5 million — excluding interest of about $104,000.
“The company does not accept the quantum of Arena’s claim under the statutory demand, which totals $5.1 million and appears to include a claim for a termination fee of $2.5 million,” managing director Bernard Olivier said in an ASX announcement released after market close on Tuesday.
“The company is currently seeking legal advice to determine its next steps.”
Shares slid nearly 21 per cent to 5.8c just after market open this morning.
New Energy, which was previously ruby miner Mustang Resources, says Arena had agreed to waive the $2.5m termination fee and therefore it is not payable.
“The company intends to vigorously defend this position,” Dr Olivier said.
New Energy says it plans to repay the amount it “considers to be owing to Arena (including all interest) as soon as possible”.
The company is also talking to potential investors regarding a refinancing and repayment of the Arena loan.
Arena was one of New Energy’s top 20 shareholders after converting part of the convertible note facility to shares.
But New Energy says the financier has since sold most of the converted shares and is no longer a top 20 shareholder.
Meanwhile, the company has also now disclosed a family relationship between Mr Olivier and non-executive director Evan Kirby — eight months after Dr Kirby’s appointment.
Dr Kirby is Dr Olivier’s father-in-law. He was appointed to the board in March this year.
Chairman Ian Daymond said in a separate ASX announcement released late Tuesday that in considering the appointment, he and the other board members “were satisfied that
Dr Kirby could act as an independent director”.
Dr Kirby, who has worked in the mining industry for over 40 years and has experience in vanadium and graphite, first met Dr Olivier in a professional capacity in 2007 — several years before Dr Olivier married his daughter in 2011, according to Mr Daymond.
In 2002, Dr Kirby established Metallurgical Management Services, an independent consulting company that has provided consulting services and metallurgical management services to several miners for the past 16 years.
Dr Kirby lives and works in Western Australia, while Dr Olivier lives and works in Southern Africa.
New Energy, meanwhile, revealed this morning that it had struck a deal with a Hong Kong-based investor group for a strategic equity placement, asset level investment and joint venture for its Caula vanadium and graphite project.
The binding agreement has been struck with UBezTT International Investment Holdings (BVI) Ltd, the private investment vehicle of Louis Ching.
New Energy says Mr Ching has extensive experience in commodity trading and business development in China, as well as several other countries in both Asia and Africa.
Mr Ching is the largest shareholder, chairman and managing director of Hong Kong-listed PT International Development Corporation, a diversified investment holding company and commodities trader.
UBezTT International will inject $1.5m into New Energy via a placement of 23 million shares at 6.5c per share.
The investor will also sink $3.5m into the Caula project and become a joint venture partner by subscribing for shares in New Energy’s wholly owned subsidiary Balama Resources, which owns 80 per cent of the project.
New Energy plans to use the cash to fund assays, metallurgical testing, a pre-feasibility study and preparation work for phase one production.
Stockhead is seeking comment from New Energy Minerals.