Lifezone Metals Closes Private Placement of US$50 Million of Unsecured Convertible Debentures
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Insights
The closing of Lifezone Metals Limited's US$50 million non-brokered private placement of unsecured convertible debentures indicates a significant capital infusion for the company. The involvement of well-known investors such as Harry Lundin and Rick Rule suggests a strong vote of confidence in Lifezone's prospects, particularly in relation to the Kabanga Nickel Project. The structure of the debentures, with an interest rate pegged to SOFR plus a premium, reflects current market conditions where investors seek higher returns to offset inflationary risks.
The early redemption clause at 105% plus interest gives Lifezone flexibility in capital management, while the mandatory conversion feature could potentially dilute existing shareholders if the company's share price performs strongly. The conversion price of US$8.00 per share will be a key figure to watch as it will determine the extent of dilution. The use of proceeds for the Kabanga Nickel Project and general purposes suggests a strategic focus on growth and operational efficiency.
Lifezone Metals' move to secure financing through convertible debentures reflects broader trends in the mining sector where companies often rely on such instruments to fund capital-intensive projects without immediately diluting equity. The terms of the debentures, including interest paid partly in shares, indicates the company's desire to conserve cash while also aligning investor returns with the company's equity performance.
The Kabanga Nickel Project is at the center of Lifezone's growth strategy and nickel is a critical component in the burgeoning electric vehicle (EV) battery market. As demand for EVs is expected to grow, nickel's strategic importance may enhance Lifezone's market position, making this financing important for the company's future. However, investors should be mindful of commodity price volatility and geopolitical risks that could impact the project's viability.
The notice that the debentures will not be registered under the United States Securities Act of 1933 nor with any state securities regulatory authority indicates that Lifezone is utilizing an exemption for private placements. This strategy is often employed to expedite the fundraising process, avoiding the more stringent regulatory requirements of public offerings. It is essential for investors to understand the implications of such unregistered securities, which may include restrictions on their resale and limited liquidity.
Investors should also consider the legal frameworks governing the Kabanga Nickel Project, including environmental, licensing and export regulations. These factors can have significant implications for project timelines and profitability. The legal landscape of mining operations is complex and subject to change, which could affect Lifezone's operational outlook and, by extension, the value of the debentures.
The unsecured convertible debentures bear interest over a 48-month term, payable quarterly, at a rate of the Secured Overnight Financing Rate (“SOFR”) plus
The debentures are convertible into common shares of Lifezone at the option of the holder at a price of
Net proceeds, once received, will be used to advance the Kabanga Nickel Project and for general corporate and administrative purposes.
The convertible debentures referred to in this notice have not been and will not be registered under the United States Securities Act of 1933 or with any securities regulatory authority of any state of
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About Lifezone Metals
At Lifezone Metals (NYSE: LZM), our mission is to provide cleaner and more responsible metals production and recycling. Using a scalable platform underpinned by our Hydromet Technology, we offer lower energy, lower emission and lower cost metals production compared to traditional smelting.
Our Kabanga Nickel Project in
Through our US-based, platinum, palladium and rhodium recycling joint venture, we are working to demonstrate that our Hydromet Technology can process and recover platinum group metals from responsibly sourced spent automotive catalytic converters in a cleaner and more efficient way than conventional smelting and refining methods.
Forward-Looking Statements
Certain statements made herein are not historical facts but may be considered “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended and the “safe harbor” provisions under the Private Securities Litigation Reform Act of 1995 regarding, amongst other things, the plans, strategies, and prospects, both business and financial, of Lifezone Metals Limited and its subsidiaries and/or affiliates.
Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” or the negatives of these terms or variations of them or similar terminology or expressions that predict or indicate future events or trends or that are not statements of historical matters; provided that the absence of these does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, statements regarding future events, the estimated or anticipated future results of Lifezone Metals, future opportunities for Lifezone Metals, including the efficacy of Lifezone Metals’ hydrometallurgical technology (Hydromet Technology) and the development of, and processing of mineral resources at, the Kabanga Project, and other statements that are not historical facts.
These statements are based on the current expectations of Lifezone Metals’ management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Lifezone Metals and its subsidiaries. These statements are subject to a number of risks and uncertainties regarding Lifezone Metals’ business, and actual results may differ materially. These risks and uncertainties include, but are not limited to: general economic, political and business conditions, including but not limited to the economic and operational disruptions; global inflation and cost increases for materials and services; reliability of sampling; success of any pilot work; capital and operating costs varying significantly from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; changes in government regulations, legislation and rates of taxation; inflation; changes in exchange rates and the availability of foreign exchange; fluctuations in commodity prices; delays in the development of projects and other factors; the outcome of any legal proceedings that may be instituted against the Lifezone Metals; our ability to obtain additional capital, including use of the debt market, future capital requirements and sources and uses of cash; the risks related to the rollout of Lifezone Metals’ business, the efficacy of the Hydromet Technology, and the timing of expected business milestones; the acquisition of, maintenance of and protection of intellectual property; Lifezone’s ability to achieve projections and anticipate uncertainties relating to our business, operations and financial performance, including: expectations with respect to financial and business performance, financial projections and business metrics and any underlying assumptions; expectations regarding product and technology development and pipeline; the effects of competition on Lifezone Metals’ business; the ability of Lifezone Metals to execute its growth strategy, manage growth profitably and retain its key employees; the ability of Lifezone Metals to reach and maintain profitability; enhancing future operating and financial results; complying with laws and regulations applicable to Lifezone Metals’ business; Lifezone Metals’ ability to continue to comply with applicable listing standards of the NYSE; the ability of Lifezone Metals to maintain the listing of its securities on a
The foregoing list of risk factors is not exhaustive. There may be additional risks that Lifezone Metals presently does not know or that Lifezone Metals currently believes are immaterial that could also cause actual results to differ from those contained in forward-looking statements. In addition, forward-looking statements provide Lifezone Metals’ expectations, plans or forecasts of future events and views as of the date of this communication. Lifezone Metals anticipates that subsequent events and developments will cause Lifezone Metals’ assessments to change. However, while Lifezone Metals may elect to update these forward-looking statements in the future, Lifezone Metals specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as representing Lifezone Metals’ assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements. Nothing herein should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results in such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which are based upon information available to us as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. In all cases where historical performance is presented, please note that past performance is not a credible indicator of future results.
Except as otherwise required by applicable law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data, or methods, future events, or other changes after the date of this communication, except as required by applicable law.
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Investor Relations –
Evan Young
SVP: Investor Relations & Capital Markets
evan.young@lifezonemetals.com
Investor Relations –
Ingo Hofmaier
Chief Financial Officer
ingo.hofmaier@lifezonemetals.com
Media Enquiries
David Petrie
Manager: Corporate Communications
david.petrie@lifezonemetals.com
Source: Lifezone Metals
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