Perth-based mining company Atlantic has completed a $25 million capital raising to finance process improvements and alterations at its Windimurra vanadium project, which has been adversely affected by commissioning delays.
The capital raising was at a price of $1.20 per share, well below their peak in April of $2.45. In trading today, the stock has slipped further, down 3.5 cents to $1.16.
Atlantic managing director Michael Minosora said the company was hoping to make up the delays it has experienced.
"While the early phase of commissioning has been slower than we would have liked, delaying first revenues, management believes that the funds raised in this placement will enable the plant to achieve full production capacity in line with the original schedule,” he said.
"The placement proceeds will be used to implement specific process improvements and modifications to optimize operation of the plant, and to temporarily supplement our operating and technical teams in the plant.
"We only acquired Windimurra in 2010 and the team has made a great effort to bring it to where it is today and we are confident in its future."
The raising consisted of an $18.2 million unconditional placement and a $6.8 million conditional placement.
The unconditional placement was issued within Atlantic’s existing placement capacity, with ASX trading of the 15.2 million shares commencing on 13th December.
The settlement of the conditional placement is subject to shareholder approval at an extraordinary general meeting in January. The placement includes the participation of Mr Minosora.
JP Morgan Australia is acting as sole lead manager, underwriter, and bookrunner for the underwritten placement, with 12.1 new shares underwritten. The underwritten placement is now full subscribed.
Investors have subscribed for 8.72 million new shares directly with Atlantic.
The Windimurra plant, located approximately 600km north of Perth at Mt Magnet and 100 per cent owned by Atlantic subsidiary Midwest Vanadium, is one of the largest proven vanadium reserves in the world.
Vanadium is used as an alloy addition in steel or titanium for strength purposes.
The plant was originally established by a local company, and then bought and closed by resources company Xstrata in 2004, due to doubt over the long-term viability of vanadium prices.
In 2010, Atlantic raised $55.5 million and purchased the plant. Vanadium production is expected to commence this month.
