Struggling Perth-based mineral explorer Pluton Resources has announced it intends to raise about $80 million through the issue of about 8 billion shares.
Struggling Perth-based mineral explorer Pluton Resources has announced it intends to raise about $80 million through the issue of about 8 billion shares.
Struggling Perth-based mineral explorer Pluton Resources has announced it intends to raise about $80 million through the issue of about 8 billion shares.
The company said there would be a minimum subscription of $47.5 million, made up of shareholders subscribing for their entitlement and creditors who had to sign commitment letters agreeing to subscribe for any shortfall shares that may arise under the offer.
Patersons Securities will act as lead manager of the offer, and will receive an offer of 133 million shares by Pluton.
Pluton said that its largest shareholder, General Nice Resources, had agreed to take up its entitlement to $13.5 million, and had also loaned Pluton $4.5 million.
In a letter to shareholders, Pluton chairman Paul D’Sylva outlined the reasons for the intended capital raising.
“The significant decline in the iron ore price and the adverse movement in the exchange rate when combined with the limitations imposed under the existing offtake arrangements have contributed to a drop in revenues and a more challenging trading outlook for the balance of 2014,” Mr D’Sylva said.
In 2012, Pluton bought the Cockatoo Island iron ore mine from Cliffs Natural Resources under a joint venture agreement with Wise Energy Group.
However tensions rose between the two companies and, as a result, Pluton was left to cover the entire cost of mining at Cockatoo.
Pluton said in a statement that the existing financial arrangements that had underpinned the joint venture attributed to the need for the capital raising.
Pluton shares have been placed in voluntary suspension, pending shareholder approval on the proposed entitlement issue.