Fresh funding secured: £587,000 interest-free to drive Bonya and Blue Fox
Kendrick Resources has lined up £587,000 of new, interest-free convertible funding to push on with its Bonya rare earths option and Blue Fox copper exploration in Zambia, while also nudging out a key debt maturity. The raise blends a £337,000 unsecured convertible loan from high net worth investors, including £37,000 from Chairman Colin Bird, and a further £250,000 draw under the existing Sanderson Capital Partners facility. Sanderson has also extended the maturity of its prior £375,000 draw to 30 June 2027.
The conversion price on the new money is set at 0.66804 pence per share, a 3% discount to the 30-day VWAP of 0.68660 pence as at 9 February 2026. In plain English: cheap, but not egregiously so for an explorer at this stage.
What exactly was agreed and where the cash goes
- £337,000 unsecured, interest-free convertible loan, convertible at 0.66804 pence per share, repayable by 31 January 2027. Chairman Colin Bird is in for £37,000 on the same terms.
- Sanderson Capital Partners to advance an additional £250,000 under its existing facility, also convertible at 0.66804 pence per share and repayable by 31 January 2027.
- Sanderson has extended the maturity date of the previously drawn £375,000 to 30 June 2027.
Use of proceeds: to advance the Bonya rare earths option agreement announced on 21 January 2026, progress the Blue Fox copper project in Zambia, and cover working capital. That is a clear allocation to near-term project advancement rather than plugging a pure cash hole.
Key financing terms investors should note
| Total new funding | £587,000 |
| Conversion price | 0.66804 pence per share |
| Discount to 30-day VWAP | 3% vs 0.68660 pence |
| Repayment dates | 31 January 2027 for the new loans; 30 June 2027 for the existing £375,000 with Sanderson |
| Interest | 0% on both the £337,000 and the £250,000 tranches |
| Company conversion right | Can convert Sanderson’s Additional Loan Tranche if the share price exceeds 1.336 pence for five or more business days |
| Qualifying Financing protection | If the Company later issues new shares for cash below 0.66804 pence, these loans convert at that lower price and on the same terms |
| Prepayment | Company can prepay with 14 days’ notice; a 5% fee applies to amounts repaid in cash. Sanderson can elect to take shares instead of cash during the notice period, avoiding the fee on that portion |
| Fees on Additional Loan Tranche | 10% arrangement fee settled by 2,663,843 shares at 0.93849 pence; plus 2% drawdown fee settled by 532,769 shares at 0.93849 pence (both to be issued on or before 31 December 2026, or as otherwise agreed) |
| Warrants | Warrants with a face value of £125,000, exercisable at 1.336 pence per share until 10 February 2029 |
Related party oversight and alignment
Colin Bird’s £37,000 participation makes this a material related party transaction under DTR 7.3. The independent directors, being Marytn Churchouse, Alex Borrelli, Kjeld Thygesen and Evan Kirby, consider his participation to be fair and reasonable insofar as shareholders are concerned. It is on the same terms as other lenders, which helps align interests.
Potential dilution if fully converted
- At the 0.66804 pence conversion price, the £587,000 could convert into roughly 87.9 million new shares. That is an estimate for illustration only.
- Fee shares total exactly 3,196,612 shares at 0.93849 pence per share, to be issued by 31 December 2026 (or another agreed date).
- If the £125,000 face-value warrants are exercised at 1.336 pence, that equates to about 9.4 million additional shares.
Actual dilution will depend on conversion elections, share price performance, whether a lower priced Qualifying Financing occurs, and whether warrants are exercised.
Why this funding matters
For a pre-revenue explorer, interest-free capital on a modest discount is a decent outcome. It reduces cash burn, buys time to execute at Bonya and Blue Fox, and the Sanderson maturity extension pushes a repayment hump into mid-2027. The Company also retains some control with the right to force conversion of the Sanderson tranche if the share price trades above 1.336 pence for five or more business days.
The other side of the coin is dilution. The conversion price is below the recent VWAP and there is a ratchet if a future raise is done cheaper, which could amplify share issuance. Fee shares and warrants add to the stack. The 5% cash prepayment fee is a minor negative, although it can be avoided where Sanderson opts to take shares on notice.
Overall,
