Mindax Secures $650K Convertible Note for WA Exploration With Sub-1% Dilution
Key Takeaways
- Mindax has executed a binding convertible note deed for A$650,000, with subscription monies due within three business days and no shareholder approval required under ASX Listing Rule 7.1.
- The note carries a fixed conversion price of A$0.033 per share, a 10% per annum interest rate accruing daily, and a 12-month term — with conversion available at the election of either party.
- Maximum dilution to existing shareholders if the note converts in full is just 0.91%, adding 21,666,666 shares to a current base of 2,363,218,532.
- The note is unsecured, meaning no tenements or company assets are pledged as collateral, and the subscriber Mr Chengze Yu has no right to nominate a director.
- Mindax is progressing discussions on a potential second convertible note, though no binding agreement has been reached and no terms have been disclosed.
Mindax secures A$650,000 convertible note to fund WA exploration push
Mindax Limited (ASX: MDX) has executed a binding convertible note deed to raise A$650,000, with subscription monies payable within three business days. The funding provides additional working capital for Western Australian mineral exploration activities without an immediate issue of ordinary shares at prevailing market prices — preserving the share price while adding capital. The note is being issued within existing placement capacity under ASX Listing Rule 7.1, meaning no shareholder approval is required.
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Breaking down the note terms
The note carries commercial terms structured to balance access to capital with flexibility on both sides. It is unsecured and ranks equally with the Company’s other unsecured and unsubordinated obligations, meaning no tenements or company assets are pledged as security. The subscriber is Mr Chengze Yu, a sophisticated investor within section 708(8) of the Corporations Act 2001 (Cth), who is not a related party and has no right to nominate a director.
| Term | Detail |
|---|---|
| Subscriber | Mr Chengze Yu |
| Face value | A$650,000 |
| Security | Unsecured |
| Interest | 10% per annum, accruing daily |
| Term | 12 months from issue |
| Conversion price | A$0.033 per share (fixed) |
| Conversion | In whole only, at election of either party before maturity |
| Repayment | Principal and accrued interest at maturity if not converted; early repayment permitted on 10 business days’ notice |
What a convertible note means for investors
A convertible note is a form of debt that can convert into shares at a fixed price rather than being repaid in cash. Companies use them to access capital without immediately issuing discounted shares, deferring dilution until (or unless) conversion occurs. This matters because it protects existing shareholders from near-term dilution while still funding operations.
For Mindax, the note is unsecured, meaning no tenements or company assets are pledged as collateral. The holder carries no voting rights before conversion. For exploration companies without revenue, non-dilutive-at-issue funding is a useful way to fund tenement commitments and exploration programmes while protecting existing shareholders in the near term.
Minimal dilution and capped voting power
The dilution picture is reassuring for existing holders. Key figures:
- Shares on issue at announcement date: 2,363,218,532
- Maximum shares on conversion: 21,666,666
- Shares on issue if note converts in full: 2,384,885,198
- Dilution to existing shareholders if converted in full: just 0.91%
Mr Yu currently holds 1,065,562 shares (approximately 0.05% of issued capital). If the note converts in full, his voting power would be approximately 1%.
Conversion carries safeguards. It is conditional on not taking the holder’s voting power above 20% and being permitted under (or exempt from) ASX Listing Rule 7.1. If those conditions are not satisfied, conversion requires shareholder approval and the note is repayable at maturity. Sub-1% dilution is negligible for existing holders, even if conversion occurs.
How the funds will be deployed
The proceeds will be applied to exploration, tenement commitments and general working capital, supporting Mindax’s Western Australian mineral exploration activities. The announcement does not detail specific projects or targets, but the funding structure indicates the Company is preserving balance sheet flexibility while maintaining exploration momentum.
A second note in the pipeline
The Company is progressing discussions in relation to a further convertible note. Those discussions are incomplete, no binding agreement has been entered into, and there is no certainty that further funding will be secured or, if secured, on what terms. The Company will update the market if and when a binding agreement is executed.
The Company
The note provides additional working capital to support Western Australian mineral exploration activities without an immediate issue of ordinary shares at prevailing market prices.
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What comes next for Mindax
Subscription monies are due within three business days. An Appendix 3B has been lodged with the announcement. Quotation will be sought for any conversion shares, though the note itself will not be quoted.
Mindax currently has 2,363,218,532 fully paid ordinary shares on issue and 121,000,000 unquoted options exercisable at $0.08, expiring 30 November 2026. This capital structure provides context for the modest quantum and minimal dilution the note represents.
The outlook depends on the outcome of discussions around a potential second note and continued exploration activity across the Company’s Western Australian tenements. The funding structure tells you management is focused on preserving share price and minimising dilution while maintaining operational capacity. What you are watching for next is whether a second note materialises, and whether exploration activity funded by this capital delivers results that justify the structure.
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