Apex Minerals has unveiled plans for a $28 million capital raising after a slower than expected ramp up of gold production at its Wiluna mine.
Apex Minerals has unveiled plans for a $28 million capital raising after a slower than expected ramp up of gold production at its Wiluna mine.
Apex said it has locked in $14 million through a share placement to institutional and sophisticated investors and plans to raise an additional $14 million through a rights issue.
All shares in both raisings are priced at 20 cents each.
Shares in Apex last traded at 20c at 11:08 AEST, down five cents.
Apex said funds raised will be used to meet financial obligations which have arisen from a slower than expected ramp up of gold production during the March quarter at the Wiluna mine.
"This capital raising puts us back where we expected to be had we not experienced the previously announced slower production ramp up," managing director Mark Ashley said.
"The proceeds will ensure Apex can implement its production growth strategy and capitalise on its significant exploration potential at Wiluna."
As part of the placement, Apex will issue around 69.5 million shares while the rights issue is on a two-for-15 basis.
West Perth-based explorer Legend Mining said it has subscribed to $2 million worth of shares in the placement, and has entered a $3 million sub-underwriting deal to subscribe to the shortfall of shares in the rights issue.
Earlier this year, Apex raised $20 million which was used to fund the delayed ramp up of the Wiluna gold mine.
The announcement is below:
Apex Minerals NL (ASX: AXM) announces that it has raised A$14 million through a share placement to institutional and sophisticated investors at 20 cents per share and has resolved to raise a further A$14 million through a rights issue at 20 cents. Azure Capital has been appointed as Lead Manager of the capital raising. The Rights Issue has been fully underwritten by Azure Capital.
The proceeds of the capital raising will be used to meet the Company's financial obligations stemming from the slower than expected ramp up of gold production in the March 2009 Quarter at its Wiluna Gold Operations.
Apex Managing Director, Mark Ashley, said with that issue now resolved and the fresh funds raised, the Company will be well placed to take advantage of its improved operational performance and the significant exploration potential at the Wiluna Project.
"We are pleased with the response to the share placement which reflected investors' ongoing support for the Company," Mr Ashley said.
He said that, as previously reported, Apex had mined and processed fewer high-grade tonnes from underground than originally expected (slot rise issues) during the March Quarter, leading to substantially lower gold sales. However, modified drilling and blasting techniques have subsequently overcome this issue, with the Company achieving its initial annualised production target of 120,000 ounces in April.
"This capital raising puts us back where we expected to be had we not experienced the previously announced slower production ramp up. The proceeds will ensure Apex can implement its production growth strategy and capitalise on its significant exploration potential at Wiluna" Mr Ashley said.
Capital Raising Details
Apex has agreed to place approximately 69.5 million ordinary shares to institutional and sophisticated investors at a price of 20 cents per share to raise approximately A$14 million before issue costs.
The shares issued under the Placement are within the 15% limit available to the company and does not require approval from shareholders.
Apex has also resolved to undertake a fully underwritten non-renounceable Rights Issue on a 2 for 15 basis at a price of 20 cents per share to raise a further A$14 million before issue costs.
The combination of the Placement and the Rights Issue results in a total capital raising of approximately A$26.2 million net of issue costs.
Eligible shareholders who hold shares as at the Record Date of 28 May 2009 will be able to participate in the Rights Issue, with the Placement shares being issued prior to the Record Date. The Rights Issue will result in the issue of approximately 71 million additional Apex ordinary shares.
