25/09/2009 - 15:25

Apex falls on $109m capital raising

25/09/2009 - 15:25

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Shares in Apex Minerals have slumped after the gold miner revealed details of a heavily discounted, fully underwritten $109 million rights issue.

Apex falls on $109m capital raising

Shares in Apex Minerals have slumped after the gold miner revealed details of a heavily discounted, fully underwritten $109 million rights issue.

The miner today said it will undertake a nine-for-two rights issue at an offer price of four cents each to raise $108.6 million. The issue is being underwritten by Patersons Securities.

News of the capital raising caused Apex's shares, which had previously been in a trading halt, to fall 3.5 cents, or 36 per cent, to close at 6.3c.

Apex said $53 million of the funds will be used to repay all of its debt while a further $23 million will be spent on mine development at its Wiluna gold operation.

About $16 million will be used for working capital while $10 million will be used to repay a short-term facility.

Apex managing director Mark Ashley said the rights issue and debt elimination would put the company in a robust financial position and enable it to undertake the mine development which would underpin an increase in production to more than 140,000 ounces a year.

"We have recruited some highly experienced technical personnel and resolved the operational issues which arose in the middle of the year," Mr Ashley said.

"The restructure will enable us to reap the benefits of this work by growing production and taking full advantage of the Company's significant gold inventory."

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