30/01/2009 - 10:53

Albidon in $40m capital raising deal

30/01/2009 - 10:53

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Nickel miner Albidon has reached an agreement with a private investment fund for a capital injection of up to $40 million through a convertible notes issue.

Albidon in $40m capital raising deal

Nickel miner Albidon has reached an agreement with a private investment fund for a capital injection of up to $40 million through a convertible notes issue.

The miner has reached in-principle agreement with Pacific Road Resources Fund for a series of proposed funding transactions of up to $US26 million ($A40 million).

Under the arrangement, tranche 1 will consist of 110 million convertible notes to raise $US6 million by the end of next month, at a strike price of 8 cents per share.

Shares in Albidon were up 0.5c to 9c at 12:47 AEDT.

On completion of the tranche PRRF will have the right to nominate up to two directors to the Albidon board.

Under tranche 2, PRRF will be issued with around 92 million notes, with a strike price of 16c each, to raise $US10 million by June this year.

Tranche 3 will see a further $US10 million raised through a number convertible notes with the strike price to be determined on a 10 per cent discount to Albidon's 30-day volume weighted average price during September this year.

Funds raised will be used solely for working capital and ramp-up costs at the Munali nickel project.

The PRRF capital injection is subject to a number of conditions including successful due diligence and shareholder approval, with a meeting scheduled for February 24.

Additionally, Albidon is proposing to raise a further $US5 million alongside PRRF's tranche 1 with discussions already started with major shareholders and other interest parties.

Last week Albidon reported disappointing December quarterly results due to a falling nickel price and technical issues at Munali.

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