Aquila high on $54m raising

News of a $54 million capital raising by South Perth-based diversified resources player Aquila Resources Ltd has ended speculation about its recent trading halt and buoyed its share price.

Aquila shares hit $7.40 after they resumed trading, significantly above the $6.35 a share price set for the placement of 8.5 million new shares.

The precious metals and coal explorer plans to use the funds to provide working capital to further develop its portfolio of iron ore and coal projects.

Aquila announced a trading halt on April 18 followed by a request for a suspension of its stock the following day, pending a release of an announcement on Wednesday.

The company’s shares recommenced trading on the Australian Stock Exchange on Monday April 24, after the capital raising announcement.

The offer has received strong initial expressions of interest from a number of institutional investors, both in Australia and internationally.

This is positive news for Aquila, as one of its aims for the placement, aside from the additional working capital, is the opportunity to broaden the company’s exposure to additional institutional shareholders.

The European and North American component of the raising will be managed by Canadian-headquartered investment manager, Haywood Securities Inc.

Aquila was incorporated in March 2000, with an initial focus on its gold tenements in the east Murchison region of WA.

The company has since broadened its exploration activities to include iron ore and coal, with projects in WA, South Australia and Queensland.

It has been active in expanding its exploration base this year, having announced the $5 million purchase of diamond giant De Beers’ Pilbara iron ore tenements in February.

The acquisition was made by Aquila and its partner AMCI Holdings, through their 50-50 joint venture company, Australian Premium Iron. The deal gives Australian Premium Iron sole rights to iron ore sourced on the tenement, while De Beers retains the diamond rights.

In addition, Aquila, in its own right outside the joint venture, is solely entitled to the rights of all other resources at the site.

The company diversified into coal in October 2001 and, in January 2004, through another AMCI Holdings joint venture, entered into an agreement to pursue opportunities for a coal mine at Aquila’s Bowen Basin coal exploration site in Central Queensland.

In assessing the coal sector, Aquila had ranked the Bowen Basin as a priority target area, and has acquired tenements in the region covering more than 3,100 square kilometres.