Frontier Diamonds Limited secured a total of up to AUD 3.6 million in a funding consisting of: A note facility with New York based investor MEF I, LP (Magna) for a total of up to AUD 2.0 million. Convertible loans with sophisticated investors of AUD 893,000 and non-convertible loans with sophisticated investors of AUD 704,000. These funds will be used to enlarge and fast track the bulk sampling and diamond recovery program, and complete the introduction of the Sub-level retreat mining method and return to full production at the Sedibeng and Star mines. Details of the facility: Within 5 days of executing the agreement, the Company will draw down AUD 1.3 million under the facility in consideration for the issue of loan notes to Magna, and has the option to drawdown a further AUD 700,000 in 120 days and prior to 150 days from the execution of the agreement in consideration for the issue of further loan notes. The company will seek shareholder approval so that the loan notes may be convertible into shares in the company. Subject to receiving shareholder approval: the initial tranche will be convertible at a fixed price of AUD 0.15 for sixty days following the date of the agreement; and after that date, the notes would be convertible at the lower of AUD 0.15 and a 10% discount from the lowest VWAP over the five actual trading days prior to the company receiving a conversion notice. Should shareholder approval not be obtained, the loan notes will not be convertible into shares in the company and Magna may request the company to repay the redemption amount of the loan notes upon 30 days' notice. The notes will have a face value of USD 1.10 for every USD 1.00 received, based on the prevailing AUD/USD exchange rate on the date of a transaction. Magna investor will receive 1,200,000 ordinary shares in the company by way of a commitment fee upon execution of the agreement. The convertible notes will have a maturity of 12 months after their respective issue dates, which may be extended by Magna at its election in limited circumstances. The loan note facility is secured by a fixed and floating charge over the assets of the company, which will fall away upon shareholder approval contemplated above being granted, following which the notes will be unsecured and bear no interest. The company has an option to repay the convertible notes prior to maturity at a premium to their face value. The agreement contains provisions restricting the periodic trading of shares on the market as well as a prohibition on short selling. Loan notes with sophisticated investors: Details of the facility: Maturity date of 30 June 2019, at which the time company is obligated to redeem the notes plus any accrued and unpaid interest. Coupon interest of 12% payable quarterly in arrears. Noteholders right to participate pro-rata in a royalty pool calculated as 10% payable on the gross proceeds of the first 100,000 tonnes processed from the Bellsbank Pit bulk sample (based on full subscription of the notes and the level of investment subscribed for). The royalty entitlement remains on foot until 100,000 tonnes of Bellsbank bulk sample material have been processed, irrespective of whether the notes have been redeemed. The company maintains the right to repay the notes at any time prior to maturity at its sole discretion. Noteholders cannot require the company to redeem until the maturity date (other than in the event of the company breaching a default condition).