Pilbara-focused minerals outfit Fox Resources has announced a rights issue to potentially raise over $7 million to further advance its heap leaching operation.
Pilbara-focused minerals outfit Fox Resources has announced a rights issue to potentially raise over $7 million to further advance its heap leaching operation.
The company has a substantial land holding in the Pilbara and established relationships with China, namely an offtake agreement in place with strategic partner Jinchuan Group Limited which is China's largest producer of nickel and a major shareholder of Fox, and hopes to raise up to $7.1 million through a one for six non-renounceable rights issue at an issue price of 15 cents per new Fox share.
The issue price represents a discount of 9.1 per cent to yesterday's closing price of 16.5 cents per share, and a discount of 13.7 per cent to the volume weighted average price of Fox shares during the last five day's trading.
In addition, subscribers will receive one free attaching option for every share subscribed for, with an exercise price of 30 cents each, expiring on March 31, 2011.
Southern Cross Equities, a resources focused stockbroking firm, will act as Fox's corporate advisors to manage the funding requirements including managing any shortfall from the rights issue.
Fox said it has a new operating strategy, based on capitalising on the 300,000 tonnes of stockpiled material to establish an initial five-year heap leaching operation. As previously announced, part of this strategy is defining further base metal resources to incorporate into the new bacterial heap leach operations that treats known sulphide resources at the company's Radio Hill, Sholl and Whundo projects.
Announcement below:
FOX ANNOUNCES NON-RENOUNCEABLE RIGHTS ISSUE WITH FREE ATTACHING OPTION
- Fox Rights Issue to raise up to $7.1 million
- Capital raising to underpin development of Fox's heap leaching operation
- Southern Cross Equities (ASX: SXE) to act as Fox's corporate advisors
- The offer includes a free attaching listed option on the basis of one free option for every share subscribed (exercise price of 30 cents, expiring 31 March 2011)
Fox Resources Limited (ASX: FXR, Fox) is pleased to announce a one for six non-renounceable rights issue at an issue price of 15 cents per new Fox share (Rights Issue).
The Rights Issue will raise a maximum of $7.1 million if all rights are taken up (based on Fox's undiluted share capital) and will underpin Fox's plans to further advance the heap leaching operation.
In addition, subscribers will receive one free attaching option (which will be quoted, subject to ASX approval) for every share subscribed for, with an exercise price of 30 cents each and expiring on 31 March 2011.
The issue price represents a discount of 9.1% to the closing price of Fox's shares on 21 April 2010 of 16.5 cents per share and a discount of 13.7% to the volume weighted average price of Fox shares during the five trading day period to and including 21 April 2010.
Southern Cross Equities, a leading resources focused stockbroking firm, has agreed to act as Fox's corporate advisors to manage current and future funding requirements including managing any shortfall from the Rights Issue.
If there is any shortfall in subscriptions under the Rights Issue, Southern Cross Equities and Fox Directors reserve the right to place the shortfall in their discretion and in accordance with ASX Listing Rule 7.2.
As previously announced, Fox's long-term growth strategy is aimed at defining further base metal resources to sustain a bacterial heap leaching operation (see Appendix) that treats known sulphide resources at the Company's Radio Hill, Sholl and Whundo projects.
The Company has a significant in-ground resource base totaling 10 million tonnes of ore containing nickel, copper and zinc, backed by established mining and logistics infrastructure.
Fox's projects are located close to the coast and near to world-class port infrastructure.
Fox has an offtake agreement in place with strategic partner Jinchuan Group Limited (Jinchuan) - China's largest producer of nickel and a major shareholder of Fox.
Full details of the Rights Issue will be set out in the prospectus which was lodged with ASIC on 22 April 2010.