Development-stage phosphate mining company Arianne Phosphate has received C$3.8-million in financing by way of an unsecured convertible debenture from an unnamed strategic investor.

The proceeds received from the financing will be used to advance the company's work on the  Lac à Paul project in Quebec's Saguenay-Lac-Saint-Jean region, specifically on the downstream facility.

The company previously announced its intention to build and operate a downstream purified phosphoric acid (PPA) plant. The two grades of phosphoric acid that will be produced at the facility are a very high-purity PPA known as "white acid", used in the production of lithium-iron-phosphate batteries and direct food additives and, a second-tier phosphoric acid used in the production of specialty fertilisers and animal feeds.

The facility will look to produce 350 000 t/y of high-purity PPA and 220 000 t/y of the second-tier phosphoric acid, making it a substantial Western producer of battery- and food-grade PPA.

"This investment comes from a group that has the skill set to help advance the project and provide us with a catalyst to aggressively move forward. In addition, demonstrating the ability to attract this investment can facilitate the project's advancement and help accelerate discussions with other parties that have expressed a strong interest in the project or shown interest in certain aspects of the project such as receiving product. This investment is a big plus for Arianne, its stakeholders, investors and the Saguenay region,” says Arianne president Brian Ostroff.

Under the terms of the investment, the strategic investor purchased a convertible debenture in the principal amount of C$3.8-million, that matures in three years and bears interest at 9.5% a year. Interest payments are added to the principal amount of the convertible debenture, and as a result, no amounts are required to be repaid by Arianne until the maturity of the instrument. 

The investor has the option to convert the principal amount of the convertible debenture at a price of C$0.35 a share, and the accrued interest thereon at a price per share equal to the greater of C$0.35 and the market price at the time the accrued interest is converted.