Chemx Secures Strategic Funding Facility Shareholder And Appoints New CEO

ChemX Materials Ltd (ASX: CMX) (ChemX or Company), an Australian based high-purity critical materials business, is pleased to announce a funding facility from an existing US-based Institutional Shareholder, to maintain momentum of existing high-purity projects in Western Australia and on the Eyre Peninsula in South Australia.

• Funding facility of up to A$6m via Convertible Notes received from existing Institutional Shareholder, Mercer Street Global Opportunity Fund, LLC, a US-based investment fund managed by Mercer Street Capital Partners, LLC, with $500k to be drawn initially and a potential further $1.7m to be provided following shareholder approval
  
• Funding to maintain momentum and advance the Eyre Peninsula High Purity Manganese Project (HPM) in South Australia and HiPurA HPA Project in Perth, Western Australia
• Chief Operating Officer Peter Lee Appointed Chief Executive Officer (CEO) following the resignation of Mark Tory

The up to $6m financing package was agreed via the issue of unsecured convertible notes (Convertible Notes) to ChemX’s existing US Institutional Shareholder, Mercer Street Global Opportunity Fund, LLC, a US-based investment fund managed by Mercer Street Capital Partners, LLC (together, the Investor), who has been a strong supporter of the Company since the IPO in January 2022.

Amvest Capital Inc (acting through Delphos MMJ LP) (Amvest) served as financial advisor to the transaction with Steinepreis Paganin acting as the legal advisor.

Proposed investment

The Company has agreed to:

initially receive $500,000 for the issue of 600,000 Convertible Notes under the facility (Tranche 1);

• subject to shareholder approval at a forthcoming General Meeting and agreement between the parties, issue a further 2,040,000 Convertible Notes for a subscription sum of $1,700,000 (Tranche 2); and
• subject to shareholder approval and agreement between the parties, issue the Investor up to a
• further 4,560,000 Convertible Notes for a subscription sum of up to $3,800,000 (Further Tranches).

The full terms and conditions of the Convertible Notes are set out in Schedule 1.

The Company has obtained legal advice from a suitably qualified and experienced lawyer that none of the features noted in section 5.9 of Guidance Note 21 are present and that the terms of the Convertible Notes appear to be market-standard, based on the reasons set out below:

• the agreement contains a floor price for the conversion of the Convertible Notes; and
• there are other convertible notes on similar terms in the marketplace.

Conditions

The closing of each tranche of the investment is subject to the satisfaction of conditions precedent including, but not limited to, the following:

• in relation to Tranche 2 and the Further Tranches, the Company obtaining shareholder approval to issue the relevant Convertible Notes and agreement between the parties as to the provision of funding;
• the Company being able to issue a cleansing statement or lodge a prospectus for the Convertible Notes (if relevant), so that the underlying securities are freely tradable on conversion of the Convertible Notes;
• the Company providing the Investors with deliverables that are considered standard for this type of transaction;
• the Investor’s voting power in the Company at no time exceeding 9.99% without the prior written consent of the Investor; and
• the Company’s shares remaining continuously quoted on the ASX without suspension for more than 5 trading days in the 12 month period prior to a closing.

Click here for the full ASX Release

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