04/03/2009 - 09:12

Catalpa soars on $67m Macquarie deal

04/03/2009 - 09:12

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Shares in Catalpa Resources have jumped as high as 56 per cent as the company executes a $67.5 million project financing deal with Macquarie Bank and plans to launch a $30 million capital raising.

Catalpa soars on $67m Macquarie deal

Shares in Catalpa Resources have jumped as high as 56 per cent as the company executes a $67.5 million project financing deal with Macquarie Bank and plans to launch a $30 million capital raising.

The financing will be for the company's $92 million Edna May gold project in Western Australia, which they hope to have up and running in around 12 months time.

Catalpa said the facility consists of a secured loan of up to $55 million, a standby mezzanine facility of up to $10 million, a $2.5 million performance bond facility and a gold hedging facility.

Under the hedging facility, the company has sold forward 352,316 ounces of gold at $1,544 per ounce for deliver from the start of operations, into the 2015 financial year.

In addition the project financing facility, Catalpa has agreed to issue Macquarie with options.

"The number of options to be issued is equal to the amount provided under the mezzanine facility divided by the option exercise price (which will be set at a 25% premium to the price at which Catalpa issues shares under the equity component of the project funding)," Catalpa said.

Additionally, 51.05 per cent shareholder, Lion Selection, has indicated that it is prepared to contribute $15 million towards the project on condition that a minimum of $30 million equity is raised.

Catalpa said it has engaged Austock Corporate Finance to manage the equity raising.

Shares in Catalpa jumped from 6.7 cents to a high of 10.5c before closing at 9.1c today.

 

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