Poseidon, Fox tap equity markets

Junior resources firms Poseidon Nickel and Fox Resources have each outlined capital raisings in a bid to bolster company balance sheets.

Poseidon said it had raised $3.7 million after placing 46.7 million shares at 8 cents per share.

The offer represents a 16 per cent discount to the company’s last trading price of 9.5 cents per share prior to the announcement.

Petra Capital and Patersons Securities assisted in the raising.

Poseidon said the proceeds of the share placement would be used to recommence dewatering at its Mt Windarra underground nickel mine, which the company is refurbishing to restart production.

The revamp is expected to cost $11 million in total and take four to six months to complete.

Poseidon said it was yet to determine if it would process ore from the mine via a third party processing facility or if it would build its own facility.

However, the company said it believed an early start to production was in the best interests of shareholders given the current strength of the nickel market.

Meanwhile, Fox Resources said it would seek to raise $4.2 million via a fully underwritten non-renounceable entitlement offer.

The coking coal explorer said the proceeds would be used to repay debt and for working capital purposes.

The raising conditions include one new share for every two shares held at an issue price of 1.5 cents per share and subscribers will also receive one free attaching two-year option priced at 4 cents.

Jungle Creek Gold Mines, an entity controlled by Fox Resources chairman Terry Streeter, has agreed to underwrite the offer for 230 million shares, or $3.4 million.

Mr Streeter holds a 16 per cent interest in Fox which will increase to 38 per cent upon completion of the deal.

Fox Resources owes Jungle Creek more than $7 million in addition to more than $400,000 to Mr Streeter in unpaid director’s fees.

As part of the capital raising, Jungle Creek has agreed to extend the due date for repayment of the loan by 12 months to September 2015.

The transaction is conditional upon shareholder approval.