Shares in gold miner Croesus Mining are in a trading halt as the company raises up to $7 million in equity funding, ahead of a company restructure following a deal with Apex Minerals.
Shares in gold miner Croesus Mining are in a trading halt as the company raises up to $7 million in equity funding, ahead of a company restructure following a deal with Apex Minerals.
Croesus is set to be transformed into a base metals explorer and change its name on the back of a deal with Apex Minerals and one of Croesus' major shareholders, Mark Creasy, a well known prospector.
Under the deal, Apex and Mr Creasy will will spin off their prospective nickel assets in Western Australia into Croesus, they said in a joint statement on Tuesday.
Croesus will undertake a share placement to raise between $5 million to $7 million, its board will be restructured and its name changed to Sirius Resources NL.
The new company will house prospective exploration acreage in WA's rich nickel sulphide belt, which hosts mines such as BHP Billiton's Leinster and Mount Keith projects.
Croesus will also have exposure to large areas of WA's nickel and base metal exploration territory accumulated by Mr Creasy over several years.
Croesus will raise up to $7 million through a private placement at 85 cents a share to sophisticated investors, who are clients of Blackwood Capital.
The transaction will be subject to the approval of Croesus shareholders at a meeting due to be held in August.
In consideration for the transfer of its nickel assets, Apex will receive approximately 67 million Croesus shares and 600 million five-year options with a strike price of three cents.
Mr Creasy, and the vendor entities controlled by him, will receive 267 million Croesus shares as reimbursement for past exploration costs incurred on the properties and interests to be transferred to Croesus.
Apex will also be reimbursed for past costs it has incurred.
After the Croesus capital raising, Apex will have a 4 per cent stake in Croesus that will rise to 27 per cent on a fully diluted basis.
Apex said this will allow its shareholders to benefit from any success in Croesus' exploration program.
Mr Creasy, who currently holds 45 per cent of Croesus, will hold a 29 per cent stake, that will decrease to 20 per cent on a fully diluted basis.
Apex managing director Mark Ashley said the decision to house the group's nickel assets in a separate company will allow it to focus on its gold operation at Wiluna.
The transaction will also increase the prospects of exploration success on the nickel tenements because of the additional funding available and Croesus' sole focus on becoming a significant nickel producer.
"The creation of a new nickel and base metals explorer provides Apex shareholders with an opportunity to have an exposure to a fully-funded exploration program in some of the worlds most promising nickel regions while benefiting from the cash flow generated at Wiluna," he said in a statement.
Croesus shares last traded at 1.6 cents. Apex shares were trading at 20.5 cents at 1008 AEST.
