West-Perth based Atlantic has announced plans for a $55 million capital raising to fund construction and commissioning of the Windimurra vanadium project in Western Australia.
West-Perth based Atlantic has announced plans for a $55 million capital raising to fund construction and commissioning of the Windimurra vanadium project in Western Australia.
Atlantic will issue 1.2 billion shares at 4.4 cents per share to raise the money.
In a statement the company said the shares will be issued to strategic international investors to raise $45 million and Australian and international institutional investors to raise another $10 million.
The funds raised will be loaned to Midwest Vanadium, the company that holds 100 per cent of the project.
Atlantic said the money, together with new lease finance and working capital facilities, will allow Midwest Vanadium to complete the construction and commissioning of the project.
Atlantic and Mineral Resources are currently working towards completion of the transaction to acquire an effective 90 per cent equity interest in Midwest Vanadium.
"The success of this capital raising highlights the strong support for our plans to commission the world scale Windimurra vanadium project," said Atlantic managing director Michael Minosora.
"Windimurra is a high quality project with a significant reserve base that is approximately 85% complete.
"Since we announced the agreement to acquire Windimurra, we have worked hard to identify crucial cost savings that we believe will place the project in a highly competitive position in the global vanadium industry cost curve," he said.
Full announcement below:
Atlantic Ltd (ASX: ATI; Atlantic) is pleased to announce the proposed issue of 1,262,500,000 shares at 4.4 cents per share to raise $55,550,000 as part of its plans to commission the Windimurra vanadium project (Project).
The shares will be issued to:
* strategic international investors to raise $45,550,000; and
* Australian and international institutional investors to raise $10,000,000.
Lead Managers to the capital raising were Mirabaud Securities LLP and RBS Morgans Limited.
Atlantic will use the funds raised to provide a loan to Midwest Vanadium Pty Ltd (MVPL), the company that holds 100% of the Project. Atlantic will provide the loan to MVPL on a first ranking secured basis alongside other first ranking secured lenders and will also receive a commercial rate of interest on the loan during the term of the debt facility. These funds, together with new lease finance and working capital facilities, will allow MVPL to complete the construction and commissioning of the Project.
As previously announced, a consortium of Atlantic and Mineral Resources Limited (MRL) is currently working towards completion of the transaction to acquire an effective 90% equity interest in MVPL.
Atlantic Managing Director Michael Minosora said he was delighted with the strong investor support for Atlantic's plans for the Windimurra vanadium project.
"The success of this capital raising highlights the strong support for our plans to commission the world scale Windimurra vanadium project," said Mr Minosora.
"Windimurra is a high quality project with a significant reserve base that is approximately 85% complete.
Since we announced the agreement to acquire Windimurra, we have worked hard to identify crucial cost savings that we believe will place the project in a highly competitive position in the global vanadium industry cost curve.
We are delighted that this placement now puts in place a critical component of the funding package required to enable MVPL to finalise construction and successfully commission the Windimurra project.
We believe Windimurra is a great opportunity for Atlantic shareholders and we look forward to working with MRL to bring the Project into production next year."
Under the placement, 1,262,500,000 shares will be issued at 4.4 cents per share, being the closing market price of Atlantic shares on 25 June 2010.
Atlantic and MRL are on track to finalise the acquisition of an effective 90% equity interest in MVPL, with completion of the transaction now expected on or around 6 August.
Following completion of the transaction, Atlantic will hold an effective 62.5% equity interest in MVPL and will also be the largest first ranking secured lender to MVPL.
Completion of the placement of shares is subject to the approval of Atlantic shareholders and completion of the acquisition of an interest in MVPL. A notice of meeting to approve the placement will be sent to Atlantic shareholders in the near future.
Shareholders of Atlantic are due to consider a number of resolutions, including a proposed change of activities and consolidation of capital, at two extraordinary general meetings of shareholders to be held today. These meetings will proceed as planned, however, given completion of the Windimurra transaction is now expected on or around 6 August, Atlantic intends to withdraw resolutions 1 and 2 dealing with the proposed change of activities and consolidation of capital from today's meeting and resubmit the resolutions at the meeting to be convened to approve the capital raising in early August.
On this basis, ASX has advised Atlantic that the proposed suspension from official quotation previously advised to begin from today will not proceed until the date of the meeting to consider the proposed change of activities and consolidation of capital.
