16/04/2013 - 09:45

Alcyone, Golden West to boost coffers

16/04/2013 - 09:45

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Alcyone chairman Paul D'Sylva.

Junior explorers Alcyone Resources and Golden West Resources are looking to raise capital through discounted rights issues worth a combined $21 million.

Silver miner Alcyone is looking to raise $14 million through a rights issue priced at just 0.6 cents per share to recapitalise and simplify its funding framework.

The issue price is half Alcyone’s most recent trading price and a fraction of the 4.8 cents at which the stock was trading in January.

The company has set a minimum raising of $4 million.

Golden West aims to raise $7 million through its rights issue to bolster the company’s cash reserves for development projects.

The company said it will use the capital to fund the initial development of its Wiluna West gold and iron ore mines and for future exploration opportunities.

The Golden West rights issue is priced at 15 cents per share, a 27 per cent discount to its average trading price this year.

The issue is underwritten by Eight Carat Securities.

Alcyone has appointed Patersons Securities to act as the corporate advisor and lead manager on the rights issue and the broker is also advising the company on further capital financing.

The company will use the funds to pay down outstanding debt and fund operational improvements, including key plant and equipment upgrades at the company’s flagship Texas silver mine in south-east Queensland.

Operational improvements to the silver mine funded through the raising will see production output rise to over 1 million ounces.

Alcyone underwent a board overhaul in March with Paul D’Sylva joining the company as chairman following the resignation of managing director Andrew King.

Mr D’Sylva said that the company was focused on turning the Texas operation around through the injection of fresh capital.

“We know what needs to be done to turn this company around and we’re taking the steps required.

“We think it is appropriate to give existing shareholders the opportunity to support Alcyone at the discounted price in this rights issue and participate in the upside from our flagship silver project,” he said.

Alcyone has also completed $1.8 million of bridge financing through debt in the form of convertible promissory notes.

The company is hoping to secure $10 million in additional funding through a pre-pay facility linked to resources investment fund Celtic Capital.

The $10 million facility from Celtic Capital would act as a standby line of funding for the company.

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