Heron receives up to $20m funding

Heron Resources has announced an equity funding package with London-based private equity fund Greenstone Resources of up to $20 million.

Under the terms of the agreement, Heron will make a private placement of shares to Greenstone at a price of 12.6 cents a share, to raise $6.8 million.

Heron says the placement price is a 22 per cent premium above the 30-day volume weighted price, and a 15 per cent premium above yesterday’s closing price.

This placement to Greenstone of 54.1 million shares will correspond to a 13 per cent shareholding in Heron.

Funds raised through the placement will be used to complement Heron’s existing cash balance to ensure development of the company’s Woodlawn zinc-copper project can proceed.

Heron says its cash balance at the end of the March quarter was $25.6 million, and it had a total of $28.4 million in cash and investments at the time.

As part of the agreement, Greenstone will nominate a director to the Heron board and provide Heron with strategic, technical and financial advice during the Woodlawn feasibility study.

Greenstone has agreed to a further investment of up to $13.2 million through underwriting of a potential pro rata Heron issue, or a future private placement to take Greenstone’s interest in Heron to 19.9 per cent.

This additional funding will be conditional upon Heron proceeding with development of the Woodlawn project and upon the future pro rata issue or placement occurring within the next four months.