Mindax Locks in A$3.9M Convertible Note to Fund WA Exploration at 4.6% Dilution
Key Takeaways
- Mindax has completed a two-tranche convertible note round totalling A$3,900,000, with the larger A$3,250,000 note subscribed by Singapore-based L&Y Investment Holdings Pte Ltd on 7 September 2026.
- The A$3,250,000 note is conditional on FIRB approval — without it, the note cannot be formally issued and L&Y holds no conversion rights, though subscription monies are available to Mindax immediately as unsecured debt.
- If the note converts in full at the fixed price of A$0.033 per share, existing shareholders face maximum dilution of 4.63%, with L&Y's voting power rising from approximately 8.04% to approximately 12.3%.
- FIRB approval must be obtained within four months of execution (extendable to eight months), and if approval is denied or conditions are unacceptable, Mindax must repay subscription monies plus 10% per annum interest within 30 business days.
- No security has been granted over Mindax's tenements or assets, and no shareholder approval was required, with the note issued within the company's existing 15% placement capacity under ASX Listing Rule 7.1.
Mindax locks in A$3.9M convertible note funding to advance WA exploration
Mindax Limited (ASX: MDX) has completed a two-tranche convertible note funding round, securing a total of A$3,900,000 to support its Western Australian mineral exploration programme. The second and larger tranche, A$3,250,000 from Singapore-based L&Y Investment Holdings Pte Ltd, was executed on 7 September 2026, completing the funding foreshadowed in the company’s 31 August 2026 announcement of an initial A$650,000 note. Funds will be applied to exploration, tenement commitments, and general working capital. No shareholder approval is required, with the note issued within Mindax’s existing 15% placement capacity under ASX Listing Rule 7.1.
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Key terms of the A$3,250,000 convertible note
The note carries a fixed set of commercial terms, which are summarised in the table below.
| Term | Detail |
|---|---|
| Subscriber | L&Y Investment Holdings Pte Ltd (Registered in Singapore) |
| Face value | A$3,250,000 |
| Security | Unsecured |
| Interest | 10% per annum, accruing daily from payment of subscription monies |
| Term | 12 months from issue |
| Conversion price | A$0.033 per share (fixed) |
| Conversion | In whole only, at the election of either party before maturity; principal and accrued interest convert at the conversion price |
| Conditions | Conditional on FIRB approval; note will not be issued unless and until FIRB approval is obtained |
| Repayment | Principal and accrued interest repayable at maturity if not converted; early repayment permitted on 10 business days’ notice |
The note is unsecured and ranks equally with Mindax’s other unsecured and unsubordinated obligations. No security has been granted over the company’s tenements or its undertaking.
Mindax has also given a negative pledge under which it must not, without L&Y’s consent, create security over all or substantially all of its assets to secure financial indebtedness. Customary exceptions apply, including for security granted to State or Territory governments in connection with mining tenements and exploration licences.
Understanding convertible notes and what this means for MDX shareholders
A convertible note is a debt instrument that gives the holder the option to convert what they are owed into shares at a pre-agreed price, rather than receiving a cash repayment. The key advantage for a company is that it raises capital without immediately issuing new shares at prevailing market prices, which can dilute existing shareholders at an inopportune moment. Mindax’s announcement explicitly cited this rationale.
For MDX investors, the dilution question is straightforward to calculate. If L&Y elects to convert the note in full (principal plus accrued interest at A$0.033 per share), the impact on existing shareholders would be as follows:
- Shares on issue at announcement date: 2,363,218,532
- Maximum shares issuable on conversion: 114,755,085
- Total shares on issue if note converts in full: 2,477,973,617
- Maximum dilution to existing shareholders: 4.63%
- L&Y’s current holding: 190,000,000 shares (approximately 8.04% of issued capital)
- L&Y’s voting power if the note converts in full: approximately 12.3%
It is worth noting that conversion is itself conditional: FIRB approval must remain in force, and the conversion must not push L&Y’s voting power above 20% or breach ASX Listing Rule 7.1. If those conditions are not satisfied, shareholder approval would be required, and the note would otherwise be repayable at maturity.
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FIRB approval — the key condition investors should watch
Because L&Y is a foreign person under the Foreign Acquisitions and Takeovers Act 1975 (Cth), the note cannot be formally issued until the Foreign Investment Review Board (FIRB) grants approval. FIRB is the Australian government body that reviews foreign investment proposals to assess whether they are consistent with national interest. Without FIRB approval, L&Y acquires no interest in any Mindax securities and holds no conversion rights.
There is, however, a practical positive in the interim: the A$3,250,000 subscription monies are payable within three business days of execution and are available to Mindax as an unsecured debt from the moment of receipt. The company can therefore begin deploying capital toward its exploration activities before formal approval is finalised.
Investors should understand the timeline and the termination risk clearly:
- L&Y must submit its FIRB application within 15 business days of execution.
- FIRB approval must be obtained within four months of execution (automatically extendable; maximum eight months unless the parties agree otherwise).
- If approval is not obtained by the deadline, or if the Treasurer prohibits the acquisition or imposes conditions unacceptable to both parties, either party may terminate the deed.
- Upon termination, Mindax must repay the subscription monies plus interest at 10% per annum within 30 business days.
As stated directly in the announcement: “Shareholders should note that there is no certainty that FIRB Approval will be obtained.”
Finally, L&Y is an existing Mindax shareholder and is not a related party of the company. No director nomination rights attach to its investment under this arrangement.
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