USA-based investment house Vulcan Phosphates has emerged as Minemakers’ major shareholder, after investing more than $2.5 million in the Perth-based explorer.
Minemakers announced today it would place 14 million shares priced at 18 cents each with Vulcan, a 33 per cent premium to its last closing share price of 13.5 cents.
Vulcan will also receive options to acquire a further 14 million shares at 30 cents per share, exercisable until April 2017.
Vulcan is a privately-held investment house formed in November 2011 by the owners of the Agrifos group of companies and co-investor Anthony Flouty, to provide a vehicle to make investments in the phosphate fertiliser sector.
The firm is also a major investor in Florida-based JCDPhosphate, which has developed a thermal technology, known as the Improved Hard Process (IHP), to improve the efficiency of superphosphoric acid production from rock phosphate.
Minemakers is also a significant investor in JDC.
Minemakers managing director Cliff Lawrenson said the introduction of Vulcan as a strategic investor would be highly beneficial to the company.
“This is a value-adding strategic investment rather than simply a means to raise funds, and we cannot think of a better group with whom to work to liberate the huge phosphate resources at Wonarah,” Mr Lawrenson said in a statement.
“This investment by Vulcan, with its deep understanding of world fertiliser markets and impressive fertiliser investment track record, is a strong endorsement of the potential to apply IHP at Wonarah to create a significant high value phosphate production facility.”
Vulcan’s Farouk Chaouni said MInemaker’s Wonarah project was a large and highly strategic resource that would be well suited for the IHP technology.
“IHP has the potential to unlock the value of Wonarah and produce a high value SPA product which currently trades in North America at about $US1,000 per tonne,” Mr Chaouni said.
“We have developed a lot of confidence in IHP through our significant investment in JDCPhosphate, so it is a logical step for us to invest in Minemakers at such an attractive entry valuation.”
Minemakers shares last traded at 14.5 cents, before entering a trading halt pending this afternoon’s announcement.