Perth based mineral explorer Arafura Resources NL has today lodged a prospectus to raise almost $11 million via a non-renounceable rights issue.
Perth based mineral explorer Arafura Resources NL has today lodged a prospectus to raise almost $11 million via a non-renounceable rights issue.
Arafura CEO Alistair Stephens said the funds raised would be used for uranium exploration purposes and would be transferred into a new uranium exploration and investment company, NuPower Resources Ltd.
The rights issue is underwritten by Bell Potter Securities Limited and will not be made available to shareholders registered outside of Australia and New Zealand.
The issue price of the 30.5 million shares will be 36 cents each.
Earlier this year, Arafura announced a corporate restructure which would, subject to shareholder and regulatory approvals, result in the company's Northern Territory uranium assets being transferred to NuPower.
Under the proposed demerger, Arafura would retain its rare earths, gold and iron-ore assets (and the uranium content of Nolans Bore) and focus on developing the Nolans Bore rare earths project.
If the proposed demerger does not proceed then Arafura will use the funds to evaluate tenements prospective for uranium, working capital in Arafura and meet the costs of the proposed demerger to date.
Arafura will retain a 10 per cent holding in NuPower which is expected to be lsted early next year.
At market close, Arafura's share price was down over five per cent to 44.5 cents.
Below is the Chairman's letter from the prospectus and Arafura's Rights Issue announcement to ASX:
Your Board is of the opinion that uranium has a long term and sustainable future for the
generation of power for developing and developed countries alike. It is for this reason that
earlier this year we announced a corporate restructure which will subject to shareholder
and regulatory approvals result in the company's Northern Territory uranium assets being
transferred to a new uranium exploration and investment company, named NuPower
Resources Limited.
Under the proposed Demerger (refer Section 1.2), Arafura will retain its rare earths, gold
and iron-ore assets (and the uranium content of Nolans Bore) and focus on developing the
Nolans Bore rare earths project. Arafura will also retain a 10% holding in NuPower.
The proposed Demerger will be preceded by a non-renounceable Rights Issue by Arafura
to raise approximately $11 million underwritten by Bell Potter Securities Limited.
Through the Rights Issue, Arafura shareholders are being offered the opportunity to
purchase new Arafura shares at a significant discount to the recent share price. The funds
raised by the Rights Issue will provide NuPower's working capital for the on-going
evaluation of the uranium assets and some working capital for Arafura.
The Demerger is subject to regulatory approval and the approval of Arafura's shareholders
at a General Meeting to be called in early 2007. Only shareholders in Arafura at the
record date for the Demerger (a date yet to be determined) will become shareholders in
NuPower upon implementation of the Demerger.
At a time of growing demand for uranium, the proposed Demerger will deliver to
Arafura's shareholders direct ownership in a purely uranium focused company in the
Northern Territory of Australia.
After the Demerger, Arafura will continue to focus on the Nolans Bore project which has
the potential to deliver long-term value to shareholders.
If the necessary approvals for the Demerger are not forthcoming, the funds that would
have been transferred to NuPower to develop the uranium assets will be used for the same
purpose by Arafura.
Arafura has established a Shareholder Information Line on 1800 217 828 to provide
information about the Rights Issue.
Yours faithfully
Peter Walker
Chairman
Arafura Resources NL
Arafura Resources NL (ASX:ARU) today announced a $10.992 million non-renounceable rights issue.
Under the terms of the rights issue the following conditions will apply:
30,535,745 shares in Arafura will be issued (assuming no existing options are exercised prior to the record date).
The shares will rank equally in all respects from the date of allotment with the existing class of quoted shares.
The issue price of the shares will be 36 cents each.
Arafura will apply for quotation of the shares issued pursuant to the rights issue on the official list of the ASX.
The rights issue is non-renounceable.
Shares in the rights issue will be offered on the basis of 2 shares for every 5 shares held by the shareholder on 5.00pm WST on 29 November 2006.
The record date to determine entitlements is 29 November 2006.
The rights issue will not be made available to shareholders registered outside of Australia and New Zealand.
The closing date for receipt of acceptances is 5.00pm WST 14 December 2006.
The rights issue is underwritten to $10,992,868 by Bell Potter Securities Limited.
Holdings statements will be dispatched on 22 December 2006.
Arafura shares will be quoted on an "ex" basis on 23 November 2006.
Arafura has previously announced plans for a proposed demerger which will deliver to Arafura's shareholders direct ownership in a dedicated uranium exploration company (NuPower Resources) focused on the Northern Territory of Australia.
If the proposed demerger proceeds, the funds raised by the Rights Issue will be used to subscribe for shares in Arafura's subsidiary NuPower Resources, working capital in Arafura and meet the estimated costs of the demerger. If the proposed demerger does not proceed then Arafura will use the funds to evaluate tenements prospective for uranium, working capital in Arafura and meet the costs of the proposed demerger to date. Full details of the intended use of funds are set out in the Prospectus that will be mailed out to all eligible shareholders.
Further information is available on a shareholder information line 1800 217 828.