West Perth-based diversified explorer Exco Resources NL has entered into agreements that unconditionally underwrite the exercise of the company's 39.99 million listed options due to expire on 28 August 2006, raising just under $8 million.
West Perth-based diversified explorer Exco Resources NL has entered into agreements that unconditionally underwrite the exercise of the company's 39.99 million listed options due to expire on 28 August 2006, raising just under $8 million.
The funds will underpin the advance of the White Dam Gold Project in South Australia, which is close to decision to mine, and the Cloncurry Copper Project in Queensland, which was recently boosted by the granting of a Mining Lease at E1 North.
The listed options outstanding will be exercised at a price of 20 cents each.
The underwriters, who include Macquarie Bank Limited, Stripe Capital Pty Ltd, Taylor Collison Limited, and RMB Resources Limited, will receive a commission of 2.5 per cent of the amount underwritten.
The company has further guaranteed the underwriters a minimum of 8 million shortfall shares (being the underlying securities). This may require a separate top up placement if less than 8 million options remain unexercised. This represents a desire on the part of the underwriters to subscribe for shares in Exco as part of the arrangement.
Two of the company's directors, Alasdair Cooke and Craig Burton, have sub-underwritten 5 million listed options ($1 million worth) each. The company will seek shareholder approval to enable them to subscribe for shortfall shares. A notice of meeting will be forwarded to shareholders shortly.
At market close, shares in Exco were up 2 cents to 26 cents.
Below is the full announcement:
Exco Resources NL is pleased to announce that it has entered into agreements that
unconditionally underwrite the exercise of the Company's listed options due to expire on 28
August 2006. There are 39,990,990 listed options outstanding with an exercise price of 20
cents each (ASX:EXSO). Accordingly, these underwriting agreements guarantee that the
Company will raise just under $8 million upon expiry of the options in late August 2006.
The underwriters, who include Macquarie Bank Limited, Stripe Capital Pty Ltd, Taylor Collison
Limited, and RMB Resources Limited, will receive a commission of 2.5% of the amount
underwritten.
The Company has further guaranteed the underwriters a minimum of 8,000,000 shortfall
shares (being the underlying securities). This may require a separate top up placement if less
than 8,000,000 options remain unexercised. This represents a desire on the part of the
underwriters to subscribe for shares in Exco as part of the arrangement.
Two of the Company's directors, Mr Alasdair Cooke and Mr Craig Burton, have sub-
underwritten 5,000,000 listed options ($1,000,000 worth) each. The Company will seek
shareholder approval to enable them to subscribe for shortfall shares. A notice of meeting will
be forwarded to shareholders shortly.
COMMENTARY
This underwriting gives certainty to the raising of just under $8 million in late August 2006. This
places the Company in a strong position to move forward with its immediate development
objectives. In particular these funds will underpin the advance of the White Dam Gold Project,
which is close to decision to mine, and the Cloncurry Copper Project, which was recently
boosted by the granting of a Mining Lease at E1 North.
The Board of Exco is delighted with the strong support for the Company, and its projects,
represented by the underwriting, notwithstanding the difficult stock market conditions at
present.
On behalf of the Board of Directors
