Morella Secures A$1.4M Convertible Note Boost for Critical Minerals Push
Morella Corporation has locked in A$1.4 million in convertible note funding from key shareholders and directors, strengthening its financial position to advance critical minerals exploration and acquisitions.
- A$1.4 million unsecured convertible notes committed
- Funding split into Tranche A (A$700k) and Tranche B (A$700k, shareholder approval required)
- 8% annual interest with 36-month maturity
- Conversion at 15% discount to 20-day VWAP, capped at 19.99% voting power
- Funds to support working capital, exploration, and strategic acquisitions
Morella Strengthens Financial Foundation
Morella Corporation Limited (ASX, 1MC) has successfully secured binding commitments for a total of A$1.4 million in unsecured convertible notes. This funding round, announced on 20 October 2025, comes from a combination of substantial shareholders, including Interra Resources Limited, aligned professional investors, and Morella’s own board members. The move underscores strong internal and external confidence in Morella’s critical minerals strategy.
Structure and Terms of the Convertible Notes
The funding is divided into two tranches, Tranche A, worth A$700,000, will be settled immediately under Morella’s existing placement capacity, while Tranche B, also A$700,000, awaits shareholder approval at the upcoming Annual General Meeting. The notes carry an 8% annual coupon, payable quarterly, and mature in 36 months. Investors have the option to convert notes into ordinary shares at a 15% discount to the 20-day volume-weighted average price, with a voting power cap set at 19.99% to comply with regulatory limits.
Strategic Implications for Morella’s Growth
Managing Director James Brown highlighted that the convertible note facilities not only reinforce Morella’s financial position but also provide the flexibility needed to advance its portfolio of critical minerals. These funds will be directed towards ongoing working capital needs, in-ground exploration activities, and targeted acquisitions across base, precious, and other complementary critical minerals. This is particularly timely as demand for such materials continues to rise amid the global clean energy transition.
Looking Ahead
While Tranche A’s settlement is imminent, the completion of Tranche B hinges on shareholder approval, introducing an element of uncertainty. The convertible notes’ conversion terms also mean that future share dilution and voting power shifts will depend on market conditions and investor decisions. Nonetheless, this capital injection positions Morella to capitalize on improving market conditions and expand its footprint in critical mineral resources.
Bottom Line?
Morella’s convertible note funding sets the stage for accelerated exploration and strategic growth in a competitive critical minerals landscape.
Questions in the middle?
- Will shareholders approve Tranche B funding at the upcoming AGM?
- How might future share conversion impact Morella’s capital structure and control?
- What specific exploration or acquisition targets will Morella prioritize with this new funding?
