Unicorn Mineral Resources (LSE:UMR) has formally signed the final legal documentation for a £1.25m unsecured loan facility with Electro Automation (Group), a company controlled by chairman Paddy Doherty.
The London-listed explorer, which is targeting zinc, lead, copper and silver deposits, said the facility secures the capital needed to complete the proposed acquisition of the Klein Aub Copper Mine in Namibia and fund its initial development.
The full £1.25m is expected to be drawn in a single tranche immediately after the Klein Aub acquisition documents are signed, which the company said is currently being finalised.
Proceeds will fund the next stage of work programmes at Klein Aub alongside working capital and general operating costs.
The loan carries a 3% establishment fee of £37,500 and interest of 10% per annum, maturing one year after first drawdown.
At the lender's request, the principal, interest and fee can convert into Unicorn shares on redemption at a 10% discount to the 30-day volume weighted average price, subject to Takeover Panel clearance where required.
Because Electro Automation is controlled by Doherty, a significant shareholder, the loan qualifies as a material related party transaction under UK Listing Rules.
Unicorn's independent directors said they consider the facility's terms fair and reasonable to shareholders.
Drawdown now hinges on final execution of the Klein Aub acquisition documentation.
News Intelligence what this means for the company
Unicorn has locked in £1.25m in funding from its chairman to complete the Klein Aub Copper Mine acquisition in Namibia, with drawdown now contingent only on final execution of the acquisition documents themselves. The loan carries 10% annual interest and a 3% establishment fee, with conversion rights into shares at a 10% discount to 30-day VWAP—terms the independent board has deemed fair. This is a related-party transaction requiring Takeover Panel clearance, but it removes the immediate financing barrier to closing the deal.
The funding secures Klein Aub's completion and initial development, but the deal remains conditional on finalising acquisition documents and obtaining regulatory sign-off on the conversion rights. Investors should monitor execution risk and the terms on which the loan converts, as a 10% discount to VWAP could dilute existing shareholders materially depending on timing and share price at redemption.
Insights assembled by AI. Editor-reviewed and grounded in tickstock’s coverage and proprietary knowledge graph.
Content is for informational purposes only, not financial advice.
