29/09/2008 - 10:04

Apex Minerals raises over $60m

29/09/2008 - 10:04


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Gold company Apex Minerals NL has entered into a subscription agreement with brokerage Goldman Sachs JBWere Pty Ltd to raise over $60 million.

Gold company Apex Minerals NL has entered into a subscription agreement with brokerage Goldman Sachs JBWere Pty Ltd to raise over $60 million.

Funds raised will go towards the development of the Wiluna gold project and fund exploration activities at its Wilsons and Youanmi projects.

The capital raising is subject to shareholder approval.


Below is the full announcement:

Apex Minerals NL (Apex) is pleased to announce that it has entered into a Subscription Agreement with Goldman Sachs JBWere Pty Ltd (GSJBW) to issue $58.5 million in a package of Senior Secured Notes (Secured Notes), together with detachable Warrants (Warrants) and detachable Gold Upside Participation Notes (GUP Notes). A signed commitment for an additional $2 million has been received but the investment is subject to shareholder approval. If approval is received, the total issue size will increase to $60.5 million.

Completion of the capital raising will ensure that Apex is fully funded and able to:

�� Complete the refurbishment, development and commissioning of the Wiluna project;

�� Continue the exploration program, and position the Company to bring the Wilsons and Youanmi projects online in accordance with the Company's integrated mine strategy; and

�� Put in place a robust gold hedge programme using predominantly put options to protect the Company's cashflows

The proceeds from the capital raising are proposed to be utilised as follows:

�� Exploration and evaluation - circa $30 million;

�� Purchase of put options to protect the Company's exposure to the AUD gold price - circa $13.5 million;

�� Pre-production capital expenditure and working capital - circa $12 million; and

�� Fees and issue expenses - circa $3 million.

The Secured Notes, GUP Notes and Warrants will be issued as a package to a group of institutional and sophisticated investors including an entity controlled by the Company's largest shareholder, Mr Mark Creasy, which has invested $2 million. Mr Kim Robinson, the Chairman of the Company, has also committed to make a $2 million investment, for which the Company will seek shareholder approval at the Annual General Meeting of the Company, expected to be held in late November 2008.

Completion of the issue of the Secured Notes the Warrants and the GUP Notes is expected to take place later today, at which point funds will be received by the Company. No funds relating to the subscription by Mr Robinson will be received until shareholder approval is obtained.

An Offering Circular containing a summary of the terms of the Secured Notes, the Warrants and the GUP Notes is attached to this announcement. Also attached is a worked example of the calculation of the exercise price of the Warrants.

In summary:

�� The Secured Notes will carry a coupon of 11.25%, paid semi-annually in arrears with the first coupon payable on 29 March 2009. The Notes mature on 29 September 2011 but may be redeemed by Apex at any time after 29 September 2009 by payment of an amount calculated in accordance with the terms and conditions of the Secured Notes.

�� The Warrants entitle the holders to subscribe for a total of 43.5 million ordinary shares. The exercise price is calculated according to a specified formula based on the time of exercise, an initial exercise price of $0.335 and the price of Apex shares at 180 and 270 days after the date of issue of the Warrant. The exercise price may not in any circumstance be less than 70% ($0.2345) nor more than 100% of the initial exercise price of $0.335. The initial exercise price of $0.335 represents a 15% premium to the 5 day VWAP of the Company's shares as at 24 September 2008.

�� The GUP Notes entitle the holders to be paid quarterly cash coupons (which may be zero) calculated by reference to a specified formula which allows the holder to participate in any increase in the average AUD gold price in a period over a specified floor price. The holders, as a group, are paid 30% (the participation rate) of the amount by which the average AUD gold price in a period exceeds a floor price, multiplied by a notional principal amount that varies over the life of the GUP Notes.

The aggregate of the notional principal amounts is 500,000. The GUP Notes are expected to mature on 7 August 2012. The floor price will be set as the London pm fix gold price (in Australian dollars) today, Monday 29 September 2008, and is able to be reset downwards on 1 January 2009, but may not be less than $900 per ounce.

The Notes, the Warrants and the GUP Notes will be issued to institutional and sophisticated investors only. None of the Secured Notes, the Warrants and the GUP Notes have been, nor will be, registered under the United States Securities Act of 1933, as amended (Securities Act) or the laws of any state of the United States and may not be offered or sold within the United States or to, or for the account or benefit of U.S. Persons. The Secured Notes, the Warrants and the GUP Notes are being offered outside the United States in reliance on Regulation S under the Securities Act.

Mr Mark Ashley, Apex's CEO and Managing Director said that this substantial capital raising not only ensures that the Company is now fully funded, but will enable it to maintain its significant and extremely successful exploration program, particularly at Wiluna, where new, potentially independent production sources will be further delineated. Mr Ashley said, "the structure of this financing is fairly unique, particularly with regard to the GUP Notes and has allowed this capital raising to be achieved with minimum dilution to current shareholders". He added, "it is pleasing to have completed this significant capital raising during a period of one of the worst financial crises the world has seen, and this clearly reflects and supports the fact that the integrated mine strategy at Wiluna is a robust and strong project".



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