16/12/2014 - 15:22

Peninsula gets $69 million in institutional cash

16/12/2014 - 15:22

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Peninsula Energy has secured $69.4 million in fully underwritten institutional funding for its Lance projects in Wyoming, enabling the company to transition to a uranium producer in 2015.

Peninsula Energy executive chairman Gus Simpson.

Peninsula Energy has secured $69.4 million in fully underwritten institutional funding for its Lance projects in Wyoming, enabling the company to transition to a uranium producer in 2015.

The funding comprises a $16.8 million placement to private equity firm Resource Capital Funds and a $52.6 million entitlement offer to shareholders, underwritten to $34.8 million.

The capital raising will allow the company to complete stage one construction and commence production at its Lance projects.

The projects' development plan comprises three stages, with capital expenditure for stage one costing $US33 million and working capital during construction and ramp-up at $US5 million.

The current development plan was finalised in October when the company reconfigured the project in order to reduce costs.

Peninsula entered into a financing agreement with funds managed by BlackRock Financial Management in December 2012 for $US22 million in senior secured notes.

Funds from the placement and entitlement offer will also be used to repay the BlackRock notes in full, which mature this month.

Resource Capital Funds, run jointly from Perth and Denver, invests exclusively in the mining sector and has previously backed MZI Resources, Wolf Minerals and India Resources.

RFC Ambrian is the lead manager to the placement and underwriter of the entitlement offer.

New strategic investor Resource Capital will invest $30.1 million through a combination of their subscriptions under the placement, the institutional entitlement offer, and a sub-underwriting component of the retail entitlement offer.

Under the terms of this involvement, Resource Capital’s shareholding upon completion of the placement and entitlement offer will be between 19.6 per cent and 25 per cent.

Existing institutional investor Pala Investments will also sub-underwrite a component of the retail entitlement offer and this, combined with its own subscription will result in a further $9 million investment and subsequent shareholding of up to 14.1 per cent.

Shareholders BlackRock and JP Morgan AM UK also agreed to invest $6.5 million and $6 million, respectively.

Resource Capital and Pala have also provided a further $17.8 million stand-by debt facility guaranteeing the non-institutional shareholder entitlement offer.

Both the placement and entitlement offer are priced at 2 cents per share, with a one-for-two free attaching option.

“Securing this funding is a defining achievement for the company as it enables us to transition to a uranium producer in 2015,” Peninsula executive chairman John Simpson said in an announcement.

Resource Capital and Pala will have the ability to each nominated a non-executive director to join the Peninsula board.

Peninsula requested an extension to the voluntary suspension of its shares today, pending an announcemnet relating to the results of the institutional bookbuild of the entitlement offer.

The company's shares closed at 2 cents per share last week, prior to its trading halt announcement last Tuesday.

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