Neometals Formalises $2M Standby Loan Facility With First Drawdown Due September
Key Takeaways
- Neometals has executed definitive documentation for a A$2 million standby loan facility with Coal Holdings Pty Ltd, formalising terms first announced on 24 August 2026.
- The facility carries a 10% per annum interest rate on drawn amounts and a 3% per annum undrawn fee, with a maturity date of 31 August 2029.
- First-ranking security over Neometals' shareholding in Avanti Exploration Pty Ltd has been granted to CHPL, with ASX waiver already obtained to permit this arrangement.
- An initial drawdown is expected on or about 16 September 2026, subject to satisfaction of remaining conditions precedent.
- Outstanding loan amounts may be converted into Neometals shares at A$0.025 per share, subject to shareholder approval and a 19.9% shareholding cap for CHPL and its associates.
Neometals formalises $2 million standby loan facility
Neometals Ltd (ASX: NMT) has executed definitive facility and security documentation with Coal Holdings Pty Ltd (CHPL) for a standby loan facility of up to A$2 million. This formalises terms first announced on 24 August 2026 and represents execution of a previously binding term sheet, not a new funding announcement.
The company expects to make an initial drawdown under the facility on or about 16 September 2026, subject to satisfaction or waiver of the remaining conditions precedent.
ASX has also granted Neometals a waiver from ASX Listing Rule 10.1, permitting the grant of first-ranking security over its shareholding in Avanti Exploration Pty Ltd (Avanti) in favour of CHPL in connection with the facility.
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Key facility terms at a glance
The definitive documentation substantially reflects the binding term sheet announced 24 August 2026. Key terms are as follows.
| Term | Detail |
|---|---|
| Lender | Coal Holdings Pty Ltd |
| Facility amount | Up to A$2.0 million |
| Interest rate | 10% per annum, payable monthly in arrears (CHPL may elect to capitalise) |
| Undrawn fee | 3% per annum on undrawn balance, payable six-monthly in arrears |
| Security | First-ranking security over Neometals’ shareholding in Avanti Exploration Pty Ltd |
| Maturity | 31 August 2029 |
| Conversion (if convertible notes issued) | A$0.025 per Neometals share, subject to 19.9% shareholding limitation |
ASX has granted Neometals a waiver permitting the grant of first-ranking security over its shareholding in Avanti Exploration Pty Ltd in favour of CHPL. Any enforcement sale of the Avanti shares to CHPL or an associate of CHPL will require prior shareholder approval under ASX Listing Rule 10.1.
What is a standby loan facility?
A standby loan facility is a pre-arranged credit line that a company can draw on as needed, rather than receiving the full amount upfront. Think of it as available capital sitting in reserve. The borrower controls when and how much is drawn, which provides flexibility that a traditional lump-sum loan does not.
Interest typically accrues only on the amounts actually drawn. In this case, however, there is also a 3% per annum undrawn fee on the unused balance, which reflects the lender’s cost of keeping capital available.
Companies favour standby facilities for working capital because they avoid the immediate shareholder dilution that comes with a share issuance. Neometals retains access to funds without issuing new shares unless the convertible note option is exercised.
The convertible note component adds another layer. Subject to shareholder approval, outstanding loan amounts may be converted into Neometals shares at A$0.025 per share. At that point, CHPL transitions from creditor to shareholder, subject to the agreed 19.9% shareholding limitation for CHPL and its associates.
Conditions and investor considerations
CHPL may, on 90 days’ notice, cancel the facility and require repayment following specified review events. Investors should be aware of the key triggers:
- Change of control of Neometals
- Failure to issue a notice of meeting by 31 October 2026 to seek shareholder approval for the convertible notes
- Failure to obtain that approval by 30 November 2026
- Failure to issue convertible notes within 5 business days of an issue notice
- Removal of Mr Christopher Reed from the Board
- A material change in Board composition without CHPL’s approval
- Raising new debt capital without CHPL’s prior written consent (subject to agreed exceptions)
Neometals may raise equity capital without CHPL’s consent, provided it gives CHPL prior notice of a material equity raising.
The facility also includes negative-pledge provisions restricting Neometals from granting additional security over its secured property or incurring additional financial indebtedness while the facility is in place, subject to agreed permitted exceptions. Neometals is also required to procure that Avanti does not grant security over its assets.
Taken together, these provisions are standard protective structures for a facility of this nature. The facility provides near-term working capital runway as the company advances its portfolio of mineral assets and processing technologies.
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Neometals’ broader project pipeline
The working capital supported by this facility underpins activity across Neometals’ active project portfolio:
- Barrambie Gold (100% NMT): Camp-scale gold project in the Murchison Goldfield, with a JV with a mining contractor providing a potentially funded pathway to near-term development of the Ironclad deposit on a 50:50 profit sharing basis.
- Utah Brine Project (51% NMT): Controlling interest in a lithium and potassium brine project spanning more than 80,000 acres in Utah, USA.
- Lithium Chemicals (70% NMT): Patented ELi PROCESS®, with a strategic MoU with Rio Tinto for testing support and licensing discussion.
- Vanadium Recovery (86.1% NMT via Novana Oy): Novana Oy advancing project financing for its first commercial plant in Pori, Finland.
Barrambie Titanium and Vanadium is currently in a divestment process and is not an active development asset within the portfolio.
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