West Perth-based mineral explorer Precious Metals Australia Ltd has raised $48.5 million through an oversubscribed placement and has announced plans to raise at least $1.5 million through a share purchase plan.
West Perth-based mineral explorer Precious Metals Australia Ltd has raised $48.5 million through an oversubscribed placement and has announced plans to raise at least $1.5 million through a share purchase plan.
The company said in November it expected to wrap up financing for its Windimurra Vanadium mine redevelopment, expected to be around $200 million, by January.
The combined proceeds from the placement and the SPP will be used for working capital and to advance the redevelopment.
The raising comes just three months after Noble Group acquired a 10% holding in the Project for $13.5 million, at the same time providing an convertible note with a face value of $8.2 million, convertible to 3.73 million fully-paid PMA shares at an equivalent issue price of $2.20 per share.
The full text of a company announcement is pasted below
Australian-based ferro-alloys company Precious Metals Australia Limited has finalised a key component of the finance package for the $200 million redevelopment of its 90%-owned Windimurra Vanadium Mine in Western Australia after completing a heavily oversubscribed $48.5 million share placement. PMA also announced its intention to undertake a Share Purchase Plan, underwritten to $1.5 million, amounting to a total capital raising of $50 million.
Following completion of the placement and SPP, PMA will have in excess of $100 million in available cash resources, effectively underpinning the equity component of the total finance package for redevelopment of the Windimurra Mine. Construction is scheduled to commence early next year with pre-production activities already well advanced.
$50M Share Placement
The share placement, comprising 24,871,795 shares at an issue price of $1.95 per share to raise $48.5 million, has been completed with Australian and international institutional institutions and clients of leading Australian broking firm, Patersons Securities Limited, which acted as Lead Manager to the share placement.
The placement was heavily oversubscribed, with strong support from both new and existing institutional shareholders in Australia and overseas.
The placement will be completed in two tranches, with the first tranche comprising 11,328,064 shares to be completed immediately within PMA's existing placement capacity to raise $22.1 million. The second tranche, comprising 13,543,731 shares, will require shareholder approval at a meeting to be convened in early 2007. The shares issued pursuant to the placement will rank equally with PMA's existing ordinary shares.
Share Purchase Plan
PMA also announced that it will make an offer under a Share Purchase Plan ("SPP") for eligible Australian and New Zealand shareholders to purchase up to $5,000 worth of PMA ordinary shares at the placement price of $1.95 per share (ranking equally with existing fully paid ordinary shares). Patersons Securities has underwritten the SPP to $1.5 million.
In the event of shareholder demand in excess of the pool of stock available under the SPP (approximately 13.3 million shares), the Company may elect to accept additional SPP applications. The SPP will be open to all eligible shareholders who are registered holders as at 5.00pm Perth time on 19 December 2006. PMA anticipates closing the SPP on 24 January 2007.
PMA's Managing Director, Mr Roderick Smith, said he was delighted with the exceptional investor response to the share placement, which reflected the robustness of the Winidmurra Project and its potential to become a profitable, long-life mining and processing operation delivering a premium quality product to world markets.
"Windimurra will account for around 8% of global vanadium production once it resumes full production by early 2008, with the significant enhancements to the project implemented over the past two years positioning it as a low-cost, competitive producer," Mr Smith said.
"The project has already attracted the support of Noble Group, which has acquired equity in the project and the Company, as well as signed up to a life-of-mine off-take agreement."
"I am pleased to welcome a number of substantial new institutional investors to our register and would like to take this opportunity to thank those who have supported this capital raising," he added.
"The completion of this raising has significantly strengthened our capital base and added significant liquidity to the share register," Mr Smith added. "The Company is now exceptionally well placed to move forward to complete financing and launch the redevelopment of this important project."
The combined proceeds from the placement and the SPP will be used for working capital and to advance the $200 million redevelopment of the Windimurra Project.
The raising comes just three months after Noble Group acquired a 10% holding in the Project for A$13.5 million, at the same time providing an unlisted, unsecured convertible note with a face value of A$8.2 million, convertible to 3.73 million fully-paid PMA shares at an equivalent issue price of A$2.20 per share.
The Company expects to finalise the balance of the $200 million finance package by late January 2007, with project construction scheduled to commence soon after, leading to first production by early 2008.
As part of an innovative strategy to lock in current prices and expedite the construction phase, PMA has already awarded four Front End Engineering and Design (FEED) contracts for the Project and commenced purchasing mining fleet and state-of-the-art processing equipment.
Last week, PMA also announced the commencement of a significant new drilling program targeting zones of vanadium mineralisation parallel to the existing Ore Reserve. This will enable pit optimisations to be completed to develop a wider and deeper pit, without waste penalty, further reinforcing Windimurra's position as the world's largest reported proven vanadium ore reserve in the world.