Nickel company Australian Mines has negotiated a capital raising deal with Patersons Securities which will pave the way for the stock to be relisted after trading was halted six months ago.
Nickel company Australian Mines has negotiated a capital raising deal with Patersons Securities which will pave the way for the stock to be relisted after trading was halted six months ago.
Australian Mines (AUZ) said Patersons will underwrite a $4.5 million rights issue which the company says is enough to repay outstanding liabilities and provide sufficient working capital.
Under the raising, shareholders will receive 10 shares at 0.1 cent each for every one share held. One free attaching option will also be attached for every 20 new shares issued.
The options are exercisable at 0.2 cents and have a four year expiry period.
AUZ said following the capital raising, it will shift its focus towards its gold assets given the historically high prices.
In December last year, AUZ closed its Blair nickel mine on the back of sharp downturn in the nickel price, after suspending the trade of shares which were last at 0.2 cents.
Part of the announcement is below:
Australian Mines (ASX: AUZ) is pleased to announce that it has negotiated with Patersons Securities Limited the terms of an underwritten capital raising that will allow the Company to be relisted on the ASX.
The Company has been seriously affected by the downturn in nickel prices and was placed in suspension on 30th September 2008. The Blair mine was closed in December 2008. Mining personnel were laid off, mine infrastructure assets have been sold and the mobile fleet has been rationalised.
We can further advise that some of our tenement and project assets are gold related and we have received an offer to underwrite an entitlements issue to shareholders/creditors to raise funds to explore for gold on these gold assets.
Also AUZ still retains its nickel assets for the future.
The proposed underwriting agreement for the entitlements issue will facilitate the repayment of outstanding liabilities and provide sufficient working capital for the Company to move forward.
Details of the issue are as follows:
-1. It is proposed that the issue would be a non-renounceable entitlement issue of 10 shares for every 1 share. These new shares will be issued at 0.1 cent to raise approx $4.5m.
2. There would also be an issue of 1free attaching option (exercisable at 0.2 cents and having a 4 year expiry period) for every 20 new shares.
Compliance Issues and Timing
The timetable for the events is being prepared and the company will need at least 2 months for the process to be completed. This will include circulating to our shareholders a signed set of full year financial reports for 2008, half year accounts for December 2008, holding our AGM which would also include shareholder approvals for the entitlements issue to proceed. Also there needs to be a prospectus prepared which will include a summary of ourcurrent projects and the proposed work programs going forward.
Exploration Interests
The Directors believe this offers the best solution for all stakeholders to recover value by pursuing the gold exploration opportunities in the Golden Ridge/Mt Martin region of WA.
