Cape Alumina announces the successful raising of $1.8 million through the issue of Convertible Notes to Significant Shareholders

Cape Alumina Limited (ASX: CBX) (“the Company”) is pleased to announce that it has secured $1.8 million in funding from three of the Company’s largest shareholders (Relevant Shareholders) through the issue of Convertible Notes.

The funds will be applied to advancing the Company’s Bauxite Hills project on western Cape York, business development and working capital requirements. The key terms of the Convertible Notes are:



? The conversion of the Convertible Notes into ordinary securities is subject to prior shareholder approval at a General Meeting to be convened for that purpose;

? In the event that shareholder approval is not received the Convertible Notes will be treated as loan instruments having the same maturity and interest rate as the Convertible Notes;

? The maturity date of the Convertible Notes is 12 months from the date of issue;

? The interest rate is 8%; accumulated interest will be capitalised and will form part of the monies owing;

? Relevant Shareholders may convert the Convertible Notes plus accumulated interest into fully paid ordinary shares (Shares) of the Company at any time at a price being the lower of 17.5 cents per Share and the volume weighted average price of Cape Alumina Shares traded on the ASX over the prior 20 business days;

? The Convertible Notes may be redeemed:
o by the Company at any time prior to the maturity date by giving written notice of the redemption to the Relevant Shareholders; or o If the Company undertakes an offer of Shares to its shareholders, the Relevant Shareholders agree to participate in the offer up to the amount notified by the Company to the Relevant Shareholders (but no more than the monies owing under the respective Convertible Notes) at a price being the lower of 17.5 cents per ordinary Share and the offer price of the Shares. After the closing of the offer, the Company will issue a redemption notice to the Relevant Shareholders redeeming the Convertible Notes to the extent they have participated in the offer;