16/03/2010 - 10:44

Catalpa to raise $20m, restructures debt

16/03/2010 - 10:44

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Explorer Catalpa Resources plans to raise $20 million with part of the funds to be directed towards a restructure of an existing debt facility with Macquarie Bank.

Explorer Catalpa Resources plans to raise $20 million with part of the funds to be directed towards a restructure of an existing debt facility with Macquarie Bank.

The West Perth-based explorer today said it will raise $10 million through a share placement to two investors, one in North America, with shares priced at $1.32.

A further $10 million is planned to be raised through a one-for-19 rights issue. Shares will be priced at $1.25 each.

Shares in Catalpa dropped two cents to $1.47 at 13:17 AEDT.

Catalpa has also struck an agreement with Macquarie to convert a $10 million mezzanine loan facility into the existing project loan facility.

Under that deal, Macquarie had agreed to forgo its entitlement to 6.06 million Catalpa option that were exercisable at 82.5c each, in exchange for the placement of 500,000 shares.

Funds from the capital raisings will also be used to accelerate exploration activity at Catalpa's Edna May gold project, in WA's Wheatbelt region.

The funds will also provide a working capital buffer during commissioning of Edna May.

"The Edna May Gold project remains within budget and ahead of schedule with commencement of 'ore commissioning' of the process plant in mid April 2010," managing director Bruce McFadzean said.

"The debt restructure demonstrates Macquarie's confidence in the project and the management team, it lowers the level of project risk, reduces interest costs and removes the need to issue a further 6.06 million highly dilutive options under the present A$10 million mezzanine loan facility."

 

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