Queensland-based Meridian Minerals has announced a $6.5 million placement to BZ Minerals to accelerate the completion of the Emanuel Range Feasibility Study on the Lennard Shelf project in the Kimberley.
Queensland-based Meridian Minerals has announced a $6.5 million placement to BZ Minerals to accelerate the completion of the Emanuel Range Feasibility Study on the Lennard Shelf project in the Kimberley.
The placement to BZ Minerals is priced at 10.5 cents per share, a 22 per cent premium to the closing share price on October 4.
Under the agreement Meridian's largest shareholder North West Mining and Geology Group has the right to contribute an additional $4.6 million at the same share price to maintain a 41.34 per cent interest in the company.
Meridian's managing director Jeremy Read said: "Meridian is extremely pleased to have such strong support for the Lennard Shelf Project from international zinc industry participants BZ Minerals and NWME."
"Given that the placement is at a 22 per cent premium to the share price, this support recognises the significant progress that has been made on the Project to date with total mineral resources increasing 90 per cent since November 2009, as well as the long term potential for lead and zinc prices," he said.
See company statement below:
The Directors of Australian resources company Meridian Minerals Limited ('Meridian' or 'Company') (ASX: MII) are pleased to announce that existing cornerstone shareholder BZ Minerals (Australia) Pty Ltd ('BZ Minerals'), has agreed to a A$6.5M placement to accelerate finalisation of the Emanuel Range Feasibility Study on the Lennard Shelf Project in Western Australia's Kimberley region. The placement to BZ Minerals is priced at $0.105/share, which is a 22% premium to the closing share price on 4 October 2010.
Under the terms of an agreement signed in July 2009, Meridian's largest shareholder North West Mining and Geology Group Co Ltd ('NWME') has the right to maintain its existing 41.34% interest in Meridian by contributing a further A$4.6M to the placement. Provided NWME takes up the right to maintain its percentage interest in the Company, the placement will raise a total of A$11.1M at A$0.105/share, following which BZ Minerals would have a 17.15% interest and NWME a 41.34% interest in Meridian.
Meridian's Managing Director Mr Jeremy Read said: "Meridian is extremely pleased to have such strong support for the Lennard Shelf Project from international zinc industry participants BZ Minerals and NWME. Given that the placement is at a 22% premium to the share price, this support recognises the significant progress that has been made on the Project to date with total mineral resources increasing 90% since November 2009, as well as the long term potential for lead and zinc prices."
"With this placement, Meridian is very well positioned to accelerate the completion of the Emanuel Range Feasibility Study and work with our consultants to ramp up the Feasibility Study. It is further evidence that our cornerstone investors continue to ensure that the Lennard Shelf Project remains well financed and provides Meridian with the opportunity to consider investing in other projects," Mr Read said.
"After reaching recent agreement with the Traditional Owners for drilling to recommence at the Cadjebut Splay prospect, we have mobilised a drill rig to site and will now accelerate other aspects of the Emanuel Range Feasibility Study following completion of the placement."
Details of Placement
BZ Minerals will subscribe for 62,151,691 shares at A$0.105/share for a total amount of A$6,525,928.
NWME has the right to subscribe for 43,797,119 shares at A$0.105/share for a total amount of A$4,598,697 to maintain a 41.34% interest in Meridian. To date, NWME have not indicated to Meridian if they will be either partially or fully taking up their entitlement to participate in the placement.
If NWME fully subscribe to their allocation of 43,797,113 shares, NWME will maintain its percentage interest in Meridian at 41.34% and BZ Minerals will have a 17.15% interest. As a part of the placement agreement, BZ Minerals has the right to appoint a Director to the Board of Meridian following completion of the placement.
Completion of the placement to BZ Minerals is conditional on approval by the Australian Foreign Investment Review Board ('FIRB') and the Reserve Bank of India ('RBI'). If NWME elect to participate in the placement, their participation will be subject to Chinse regulatory approvals, including the approval of the Chinese National Development and Reform Commission ('NDRC').
