West Leederville's Cortona Resources Ltd has launched a share purchase plan to raise around $1.25 million as part of the acquisition price of Moly Mines Ltd subsidiary Big Island Mining Pty Ltd.
West Leederville's Cortona Resources Ltd has launched a share purchase plan to raise around $1.25 million as part of the acquisition price of Moly Mines Ltd subsidiary Big Island Mining Pty Ltd.
Big Island, which holds a group of gold assets in New South Wales, will cost the company $5 million in cash upon settlement and a further $4 million on a decision to mine or once a 1 million ounce resource is indicated.
Cortona will also issue 12 million shares at 20 cents each and 8 million options at 35 cents on settlement, with a further 8 million at 50 cents to be issued on a decision to mine.
Under the Share Purchase Plan, the company will offer around 3.9 million shares at 32 cents each to raise the money, with stockholders able to purchase parcels of either $2,500 or $5,000 worth of shares free from commissions or brokerage costs.
The offer is not underwritten, and will open on May 25 to close June 22.
The remainder of the Big Island acquisition costs will be met through a placement, subject to shareholder approval.
The full text of a company announcement is pasted below
The Board of Directors of Cortona Resources Limited (Cortona Resources or Company) has approved the introduction of a Share Purchase Plan (Plan). The Plan entitles Eligible Shareholders in the Company, irrespective of the size of their shareholding, to purchase either a parcel of $2,500 or $5,000 worth of ordinary fully paid shares in the Company (Shares) free from all brokerage and
commissions (Offer). This enables smaller Shareholders to increase their stake and create marketable parcels in a cost effective manner.
All Directors intend to take up their full entitlement under this offer and encourage you to take up your rights.
Price of Shares under the Offer
The purchase price of the Shares being offered under the Plan is $0.32. The closing market price of Cortona Resources Shares during the 30 days prior to the Offer being made has traded between $0.30 and $0.36, with the average closing market price being $0.33. The purchase price of shares offered at $0.32 is therefore at a discount to the average market price of Cortona Resources Shares (as traded on ASX) in the 30 days prior to this Offer.
Cortona Resources will be offering $1.25 million and the Offer is not underwritten. However, any shortfall may be offered to third parties.
Current Activities
Details of the Company's current activities were included in the recently released March 2007 Quarterly Activities Report and are set out in the announcements made by Cortona Resources to ASX and are available from the ASX website.
The funds raised under the Plan will be used to acquire Big Island Mining Limited, and fund the Company's exploration activities at its NSW and WA projects.
Shareholders Eligible to Participate in the Plan
The right to participate in the Offer under the Plan is available exclusively to shareholders who are registered as holders of Shares in Cortona Resources at 5pm (WST) on the record date of 21 May 2007 and whose registered address is in Australia (Eligible Shareholders).
Subscription and Application Procedure
If you would like to participate in the Offer, please return your completed Application Form, together with your cheque for the subscription monies for the number of Shares you wish to acquire to the Company on or before the closing date of 5pm (WST) on Friday 22 June 2007. No late applications will be accepted.
Please note the maximum investment per shareholder is $5,000 (being 15,625 shares @ 32 cents) and the minimum investment is $2,500 (being 7,813 shares @ 32 cents). Shareholders are entitled to apply only for $2,500 or $5,000 of Shares. The maximum investment any Shareholder may apply for will remain $5,000 even if a Shareholder receives more than one Offer (whether in respect of a joint holding or because the shareholder has more than one holding under a separate account).
Additional Information and Important Dates
The Offer cannot be transferred and the Directors of the Company reserve the right to reject any application over $5,000. Shares allotted under the Plan will be issued no later than 5 business days after the closing date of the Offer. Application for quotation on ASX of the new Shares will be made immediately following the issue of those Shares.
In accordance with the requirements of the ASX Listing Rules, the Offer of Shares under the Plan is limited to 30% of the Company's current issued share capital. The Directors have elected to offer 3,906,250 Shares under the Offer. The Directors may, in their absolute discretion, reject or scale-back any application.
If the Company rejects or scales-back an application or purported application, the Company will promptly return to the Shareholder the relevant application monies, without interest.
In the event that less than the maximum number of Shares that may be issued under the Offer are applied for pursuant to this Offer, the shortfall may be placed at the discretion of the Directors.
The market price of the Shares in the Company may rise and fall between the date of the Offer and the date that any Shares are allotted to you as a result of your acceptance of this Offer. This means that the subscription price you pay for the Shares may exceed the market price of the Shares at the date of allotment of Shares under this Offer. The Board recommends that you obtain your own financial advice in relation to the Offer and consider price movements of Shares in the Company prior to accepting this
Offer.
Offers made under the Plan are not renounceable (ie. eligible shareholders may not transfer their rights to any Cortona Resources Shares offered under the Plan).
Indicative Timetable
Record date of Offer 21 May 2007
Opening date of Offer 25 May 2007
Closing date of Offer 22 June 2007
Issue of Shares under the Plan 28 June 2007
Quotation of Shares on ASX 3 July 2007
These dates are indicative only. The Company may vary the dates and times of the Offer without notice. Accordingly, shareholders are encouraged to submit their Application Forms as early as possible.