Lithium producer Galaxy Resources gained as much as 16 per cent in trading this morning after announcing the completion of a $65 million institutional capital raising to be used on its Mt Cattlin mine at Ravensthorpe and a Chinese lithium project.
Lithium producer Galaxy Resources gained as much as 16 per cent in trading this morning after announcing the completion of a $65 million institutional capital raising to be used on its Mt Cattlin mine at Ravensthorpe and a Chinese lithium project.
The capital raising, which the company said was oversubscribed almost three times, will act as cash buffer during commissioning and start up as the Ravensthorpe project moves to full production and help fund the Jiangsu Lithium Carbonate Project in China.
Galaxy managing director, Iggy Tan was delighted with the response which reflects a strong endorsement for the lithium market and the company's strategies to fast track development of its Ravensthorpe mine and China production facilities.
"The capital raising will complement the $160 million Creat equity and debt funding package for the development of all our projects," he said in a statement.
The company's intention is for the funds to reduce the project debt, available through the recently announced Creat full debt facility of $130 million, to a conservative level of around 60 per cent as the project meets expected cash flows.
At AEST1330 Galaxy shares were up 12 cents, or nearly 7 per cent, to $1.87 after hitting an earlier peak of $2.03.
Full announcement below:
SUCCESSFUL COMPLETION OF A$65M INSTITUTIONAL CAPITAL RAISING
Highlights
- Successfully completes institutional capital raising of A$65 million.
- Significant worldwide support for Galaxy with the raising almost three times oversubscribed.
- Complements the A$160 million debt and equity funding package recently agreed with Creat.
- Raisings all subject to shareholder approval on 14 October 2009.
- The funds will act as cash buffer during commissioning and start up and will reduce project debt to conservative levels (60%) as the project moves to full production.
Emerging lithium producer, Galaxy Resources Limited (ASX: GXY), today announced the successful completion of an institutional capital raising of A$65 million as part of the funding process for the Mt Cattlin mine at Ravensthorpe and the Jiangsu Lithium Carbonate Project in China.
The Company will place 51 million Shares to sophisticated and institutional investors at a fixed issue price of $1.28, which isapproximately the 30 day average trading price on ASX immediately prior to launching the capital raising roadshow on 11 September 2009. The placement is subject to shareholder approval, at an Extraordinary General Meeting on 14 October 2009.
The joint lead managers of the raising were State One Stockbroking Ltd and Helmsec Global Capital Ltd.
Galaxy Managing Director, Mr Iggy Tan, said there was strong Australian and International institutional investor support for the Company and the capital raising, which was almost three times oversubscribed.
"We are delighted with the response which reflects a strong endorsement for the lithium market and the Company's strategies to fast track development of our Ravensthorpe mine and China production facilities," Mr Tan said.
"The capital raising will complement the $160 million Creat equity and debt funding package for the development of all our projects".
The Company's intention is for the funds to reduce the project debt, available through the recently announced Creat full debt facility of A$130 million, to a conservative level of around 60% as the project meets expected cash flows.
