High-Interest Director Loan Highlights Globe Metals’ Funding Pressure

Globe Metals Secures Director-Backed Funding

Globe Metals & Mining Limited (ASX: GBE) has announced a significant injection of short-term funding through an unsecured loan facility of up to US$1.2 million provided by Director Bo Tan. This strategic move aims to bolster the company’s working capital position as it advances its updated Feasibility Study for the Kanyika Niobium Project in Malawi.

The facility is structured to be drawn down in multiple tranches between mid-February and mid-April 2025, allowing Globe to manage cash flow with flexibility. Importantly, this funding is non-dilutive, preserving existing shareholders’ equity while providing the necessary financial runway to secure off-take agreements and progress project development.

Loan Terms Reflect Urgency and Risk

The loan carries a notably high interest rate of 20% per annum, with interest capitalised daily and added to the principal, underscoring the short-term and high-risk nature of the funding. The repayment term is set at eight months from the first drawdown, with provisions for early repayment subject to a one-month interest penalty. The lender retains the right to cancel the facility after US$400,000 has been drawn, contingent on the company securing alternative funding.

These terms highlight the delicate balance Globe must maintain between accessing immediate capital and managing its financial obligations amid ongoing project development challenges.

Context: The Kanyika Niobium Project

The Kanyika Niobium Project, located in central Malawi, holds significant promise with a substantial JORC-compliant mineral resource estimate reported in 2018. The project is designed to be developed in two phases, integrating mining, concentration, and refining to produce high-purity niobium and tantalum oxides for export to Western markets.

Completion of the updated Feasibility Study is a critical milestone for Globe, as it will underpin efforts to secure binding off-take agreements and attract further investment. The recent loan facility directly supports these objectives by ensuring the company has the necessary liquidity to maintain momentum.

Board Confidence and Forward Outlook

The Board has expressed strong appreciation for Director Bo Tan’s continued support, signalling confidence in the project’s potential and the company’s strategic direction. However, the high cost of capital and short repayment horizon suggest that Globe will need to secure additional funding or generate operational cash flow within the coming months to avoid financial strain.

As Globe navigates this critical phase, market participants will be watching closely for updates on the Feasibility Study’s progress and any new funding arrangements that may emerge.