26/10/2011 - 09:40

Perilya launches $110m rights issue

26/10/2011 - 09:40

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Perilya launches $110m rights issue

Diversified miner and explorer Perilya says it will tap shareholders for up to $110 million to pay off debts accrued through the acquisition of Globestar in January, continue the development of the Potosi zinc/lead mine in Broken Hill and advance exploration at its suite of minerals assets.

Perilya announced today it would launch a non-renounceable one for two rights issue, to raise a minimum of $100 million and up to $110.5 million.

The new shares under the rights issue will be priced at 42 cents, Perilya said.

Perilya’s shares are currently in a trading halt, having last traded at 52 cents.

Perilya’s largest shareholder, China’s Zhongjhin Lingnan Mining, has agreed to subscribe for its full entitlement under the rights issue, representing 52 per cent of the shares on offer.

Zhongjin has already obtained Chinese and Australian regulatory approvals to go ahead with the investment.

UBS will act as Perilya’s lead underwriter and sole manager with regards to the rights issue.

Perilya said the funds would be used to deleverage its balance sheet following its acquisition of GlobeStar, which was funded with the support of bank finance.

“The acquisition of Globestar is already delivering significant benefits to Perilya and exceeding expectations,” managing director Paul Arndt said.

“The retirement of a portion of debt associated with funding this acquisition is a core part of our operating model.

“We are pleased to have the support of our major shareholder for this transaction and to be able to provide the opportunity for all Perilya shareholders to further support the growth of their investment in the company.”

Perilya said it would also continue the development of the Potosi zinc-lead mine, targeting first production in late 2012/early 2013.

The rights issue will also fund continued exploration at Perilya’s North Moolooloo zinc silicate project, North Mine Uppers and Broken Hill, the Moblan lithium project in Canada, the Cumbie Hill laterite nickel project in the Dominican Republic and the Mount Oxide copper project in Queensland.

“Following conclusion of the transaction, Perilya will be well placed to address its organic growth pipeline and to deliver additional projects which complement Perilya’s existing production from Broken Hill and the Dominican Republic,” Mr Arndt said.

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