Angkor Resources Corp. has closed a previously announced non-brokered private placement of units with Sorbie Bornholm LP for gross proceeds of $3.5 million, the company reported via NEWMEDIAWIRE. The financing is notable for its unusual structure, which ties the release of proceeds and shares to a monthly settlement mechanism rather than delivering all capital upfront.
The units consist of 14,000,000 common shares priced at $0.25, 2,870,000 warrants exercisable at a fixed $0.32 per share with a three-year maturity, and 11,130,000 additional warrants exercisable at a 5% premium to the volume weighted average price of the common shares over the preceding 20 consecutive trading days. The additional warrants will be issued in monthly tranches over 24 months and also carry a three-year maturity. All warrants are subject to an equity blocker preventing exercise if it would push Sorbie’s ownership above 9.99% of issued and outstanding common shares.
Rather than receiving cash directly, the subscription proceeds have been deposited by Sorbie under an ISDA Credit Support Annex in the form of a portfolio of UK government bonds with a fair market value of not less than $3.5 million. The parties also entered into a Sharing Agreement and a Securities Escrow Agreement under which the common shares have been deposited with Olympia Trust Company. Starting 30 days from closing, the proceeds, common shares, and additional warrants will be released in 24 equal monthly tranches.
The Sharing Agreement measures Angkor’s economic interest at each monthly settlement against a benchmark price of $0.3144. If the VWAP at settlement is below the benchmark, Angkor receives less than 100% of the monthly release amount on a pro-rata basis; if the VWAP is above the benchmark, Angkor receives more than 100%, with no upper limit on additional proceeds. However, the maximum number of common shares Sorbie can receive at each settlement is fixed, capping dilution. This structure aligns the company’s realized funding with its share price performance over two years, introducing both upside potential and variability compared with a standard private placement.
Angkor also paid Sorbie a corporate finance fee of $210,000 in securities: 840,000 common shares at $0.25, deposited into escrow under the Escrow Agreement, and 840,000 warrants exercisable at $0.32 expiring in three years. A finder’s fee was paid to an arm’s length party consisting of $175,000 in cash payable in monthly tranches over 24 months and 700,000 finder warrants exercisable at $0.32, vesting in equal monthly tranches over 24 months with a three-year expiry.
Angkor Resources is a Canadian public company engaged in the exploration and development of mineral and hydrocarbon opportunities in Cambodia and other strategic jurisdictions. The staged release of capital may provide the company with sustained funding while limiting immediate dilution, but it also exposes the company to market price fluctuations that could reduce the amount received in any given month. For investors, the deal’s outcome will depend on both the company’s operational progress and the trajectory of its share price relative to the $0.3144 benchmark. Further details are available in the original release at www.newmediawire.com, and the company’s website can be found at resources.com.
