Windimurra Vanadium Ltd today completed a $25 million capital raising, joining a handful of small and mid-cap mining companies thathave defied the market downturn to raise additional funds.
Windimurra Vanadium Ltd today completed a $25 million capital raising, joining a handful of small and mid-cap mining companies that have defied the market downturn to raise additional funds.
It follows two capitral raisings in the Canadian market - Andrean Resources Ltd raised C$40 million yesterday and Bannerman Resources Ltd today completed a C$21 million capital raising.
In additiona, Allied Gold announced yesterday that major gold miner Barrick Gold had agreed to invest $35 million to acquire a stake in Allied and in one of its projects.
Windimurra placed 12.6 million shares at $2.00 per shares, with the placement oversubscribed.
The mining company's focus is the development of the Windimurra Vanadium Mine, located 600km north east of Perth in WA's Mid-West region.
WVL has a strategic alliance and off-take agreement with leading global supply chain manager, Noble Group Limited, based in Hong Kong, which has agreed to purchase the total vanadium output of the Windimurra mine, at prevailing market prices for the life of the mine.
The annoucement is pasted below:
Windimurra is pleased to announce that it has placed 12.6m shares at $2.00 per share to institutional and sophisticated clients of Euroz Securities Limited, to raise $25.2m.
The placement was oversubscribed demonstrating strong support from existing and new shareholders for the Windimurra project.
"We are very pleased with this successful outcome, particularly given the current volatile market conditions", Dr Iain Scott, the Managing Director said.
Funds raised via the placement will be used to bring forward the commencement of mining by 3 months to ensure that the optimal ore blend is available for the start of process commissioning.
This will improve vanadium recoveries through the beneficiation plant circuit during the critical early stages of production and enhance the overall economics of the project.
In addition, the strengthening of the A$ since the beginning of the year when Windimurra raised debt in US$ meant a small amount of additional funds was required to ensure that the company's A$ construction cost budget remained fully funded.
For the operational phase, the company has hedged the FX exposure from having to pay A$ operating costs out of US$ sales revenue for the period through to December 2011 by the purchase of 86 cent A$ call options for 75% of operating costs.
Significant progress has been made on the construction of the plant, which is on track for completion before the end of the year.
The raising has the added benefit of replenishing the contingencies included in the construction budget.
Dr Scott commented that "We believe that this is a prudent approach given the cost pressures in the West Australian construction market and provides additional reserves to underpin completion of project construction."
