Proceeds from the note will used to complete the maiden Coal Resource estimate for Titiribi Coal Project in Colombia, advancing the Scoping Study and for general corporate and working capital.
"I am very pleased that we have been able to establish a relationship with RCF, which is recognised as a leading resource projects investor, and thank it for its support," chairman Paul Kopejtka said.
Ascot will now convene an extraordinary general meeting to seek shareholder approvals for the issue of shares on conversion of the note by RCF.
The Note is convertible at RCF's election into ordinary fully paid shares in the Company at a conversion price of A$0.18 per share, representing a 25% premium to the last traded price of $0.145 per share.
It also has the ability to redeem the note on or after 9 May 2014 by giving the requisite notice to RCF.
The Note carries a coupon rate of 14% per annum, payable quarterly in arrears.
At the company's election, coupons may be paid in the form of AZQ shares, cash or a combination of cash and shares, with any shares issued being priced at a 5% discount to prevailing market prices.
Resource Capital Funds
Resource Capital Funds is a mining focused private equity firm that has been actively investing in the sector since 1998.
Over the last fifteen years, the funds have made investments in about 113 mining companies, with projects in 39 countries and exposure to 28 different mineral commodities.
RCF offers a global reach with primary offices in Denver, Colorado, and Perth, Australia, with satellite offices in New York, Toronto, and a London representative.
It is a long term investor, typically supporting portfolio companies and advancing projects for a four to seven year period.
Titiribi Coal Project
Ascot had recently revealed its plans to fast track development of its 90%-owned Titiribi coal project in Colombia, which consists of 3 mining licences with an option over three more adjoining concessions that in total cover about 700 hectares within a region that hosts a number of coal bearing formations.
Ascot had expanded its Phase 1 drilling program that it started in January after continued intersection of significant coal seams within the El Balsal and El Silencio licence areas.
Significant coal intersections include cumulative thicknesses of 7.3 metres, 13 metres and 9.5 metres.
The 14 well program - up from the original 10 - will allow the company to more accurately correlate the multiple coal seams encountered within the concession areas and confirm their continuity.
Ascot is trading at above 55% of its 31 March 2013 cash backing of $1.55 million, or $0.05 per share. Its current market capitalisation is $2.68 million with a share price of $0.09.
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