Ann: Exploration Update, page-9

The headline rate (7%) is good but I don't like the ability for the lender to choose to take interest repayments in shares on a quarterly basis. Likely to mean a decent amount of dilution before even further dilution to fund capex.

Biggest concern is principal needing to be repaid in 36 & 24 months respectively, if there isn't cash available, that's a heap more dilution. Considering we are talking mining in the DRC, expecting cash flow to commence quickly without delays is unlikely and being able to pay in cash is unlikely.

The deal is basically a convertible note. If the lender takes the stance they want to be paid in shares, which is linked to VWAP, they want the share price as low as possible (see the Bergen or Magma convertible note effect). If the share price stays low, capex isnt getting funded. Capex doesnt get funded, no cash flow and the dilution to repay the interest and principal will wipe existing shareholders out.

To put it simply, if NZC got the same deal requiring repayment of whole principal in cash or shares in such a short time frame, id be selling the rest of my stock.