Loan from Chair Signals Confidence but Highlights Funding Risks for Genmin
Genmin Limited secures a A$2 million unsecured loan from its non-executive Chair to support working capital as it advances the Baniaka iron ore project in Gabon.
- A$2 million unsecured loan from non-executive Chair Greg Lilleyman
- Loan carries 12% annual interest, repayable by June 2026
- Funds earmarked for general working capital needs
- Potential future conversion of loan to equity pending approvals
- Supports progress toward commercial production at Baniaka by late 2026
Loan Details and Strategic Implications
Genmin Limited (ASX: GEN), an emerging iron ore producer focused on Gabon, has secured a A$2 million unsecured loan from Injiview Pty Ltd, an entity related to its non-executive Chair, Greg Lilleyman. This arm’s length loan, which can be drawn immediately, carries an interest rate of 12% per annum and is repayable by 30 June 2026, with the possibility of extension or conversion to equity subject to regulatory and shareholder approvals.
The injection of funds is intended to bolster Genmin’s general working capital as it continues to advance project funding for its flagship Baniaka iron ore project. The loan arrangement signals a strong vote of confidence from the Chair in both the company’s prospects and the political stability following Gabon’s recent democratic process.
Baniaka Project Progress and Outlook
Baniaka, located in southeast Gabon near the provincial capital Franceville, is positioned as a potentially transformative iron ore hub. The project benefits from existing transport and renewable energy infrastructure, with long-term access secured for commercial operations. Genmin holds a 20-year mining permit and environmental approvals, positioning Baniaka to become Gabon’s first commercial iron ore mine.
The company targets an initial production rate of 5 million tonnes per annum (Mtpa), with plans to scale to at least 10 Mtpa over time. Commercial production is anticipated to commence in late 2026, contingent on securing project-build financing. Genmin is actively engaged with potential financing partners to achieve this milestone.
Financial and Market Considerations
The loan’s unsecured nature and relatively high interest rate reflect both the company’s current funding needs and the risk profile of advancing a large-scale mining project in a frontier jurisdiction. The option to convert the loan into equity offers flexibility but introduces potential dilution for existing shareholders, dependent on future approvals.
Genmin’s broader portfolio includes additional exploration projects such as Bakoumba and Bitam, which add optionality for future growth beyond Baniaka. However, the immediate focus remains on progressing Baniaka through to production and securing the necessary capital to do so.
Looking Ahead
This funding move underscores the company’s commitment to advancing Baniaka despite the challenges inherent in project financing. Investors will be watching closely for updates on financing arrangements, equity conversion decisions, and progress toward the production target timeline.
Bottom Line?
Genmin’s loan from its Chair is a clear confidence signal but raises questions on financing strategy ahead of Baniaka’s production ramp-up.
Questions in the middle?
- Will Genmin convert the loan into equity, and what impact will that have on shareholder dilution?
- How soon can Genmin secure project-build financing to meet its late 2026 production target?
- What are the risks and contingencies if Gabon’s political or regulatory environment shifts?
