25/02/2014 - 12:14

Saracen plans $60m capital raising

25/02/2014 - 12:14

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Saracen Mineral Holdings has taken advantage of a strong share price rally to launch a capital raising to fund its Thunderbox project acquisition and strengthen its balance sheet.

Saracen plans $60m capital raising

Saracen Mineral Holdings has taken advantage of a strong share price rally to launch a capital raising to fund its Thunderbox project acquisition and strengthen its balance sheet.

The Perth-based gold miner will tap shareholders for about $61 million in a placement and entitlement offer.

When it announced the $23 million Thunderbox acquisition last month, it said funding would be from cash and increased debt facilities with Macquarie Bank.

It now aims to raise $27.7 million through a placement of about 89 million shares at 31 cents per share to institutional investors.

The company also plans a two-for-11 non-renounceable entitlement offer at the same issue price to raise a further $33.6 million.

Evans & Partners and Macquarie Capital are acting as joint bookrunners and lead managers.

The issue price represents a 19.1 per cent discount to Saracen's five-day volume weighted average price, but is well above trading levels that prevailed for most of the past year.

The stock was valued at just 10 cents in July and was trading as low as 18 cents in December before rallying briefly to as high as 45 cents.

Saracen said the funds would be put towards the Thunderbox acquisition (from Norilsk Nickel), reducing existing debt and accelerating development and exploration activities.

The gold miner has meanwhile posted a half-year net profit of $3.9 million, up from a $29.5 million loss in the previous corresponding period.

Revenue was up 13 per cent to $110.6 million, while earnings before interest, tax, depreciation and amortisation were slightly higher at $29.6 million.

The miner produced 72,337 ounces of gold in the six months to December 2013, up 15 per cent on the first half of the previous year.

Saracen managing director Raleigh Finlayson said the company's substantial gold hedge book had insulated revenues to a significant degree against price volatility over the period.

"This strong financial position and the support our hedge book provides has allowed us to recently acquire the Thunderbox operations at a time when many companies in the resources sector are still under pressure to reduce costs and debt,"  he said.

"This is a quality asset and provides Saracen with the scope to generate profitable gold production over many years."

The company did not report an interim dividend for the period.

Its shares are in a trading halt as the company undertakes its equity raising, having last traded at 37.5 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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