FOX Resources has announced that it has reached an in principle agreement to place $3.4 million worth of its stock with UK and European institutional investors at 58 cents a share.
It is also going ahead with a non-renounceable rights issue to raise about $5 million.
Through that issue, 8.7 million shares will be offered at 57 cents each on the basis of one share for every six Fox shares held and 8.7 options with an exercise price of 75 cents are being offered at 1 cent each on a one option for every rights share subscribed to.
The issue is fully underwritten by Findlay & Co Stockbrokers.
Funds from the placement and the rights issue will be applied to reduce debt, ongoing exploration and development activities including the Radio Hill nickel mine, the prospective Mt Sholl nickel sulphide deposits and the Whundo Copper deposit and for working capital purposes.
The prospectus to the issue is expected to be out on November 15.
The placement and rights issue announcement follows the news that Western Areas had entered into an agreement to acquire 17.5 per cent of Fox’s listed capital.
The Western Areas involvement caused some consternation because it involved issuing 3.45 million of its shares to Jungle Creek Gold Mines, a company associated with Western Areas director Terrance Streeter.
That deal would further boost Mr Streeter’s already sizeable 27 million share holding in Western Areas.
The Western Area’s purchase of Fox shares still has to be approved by Western Areas shareholders.
Fox will be producing about 35,000 tonnes of nickel and copper concentrates a year.
It is a top 10 Australian nickel sulphide producer.