Shaw River Resources is planning to raise $5 million via a share placement and share purchase plan to fund further exploration of its manganese tenements in the Pilbara and Ghana.
Shaw River Resources is planning to raise $5 million via a share placement and share purchase plan to fund further exploration of its manganese tenements in the Pilbara and Ghana.
In a statement to the Australian Securities Exchange, Shaw River said it will raise up to $3.58 million through the placement of up to 27.5 million shares at 13 cents each to sophisticated and professional investors.
The company will also raise up to $750,000 via the SPP at the same issue price to registered shareholders.
The funding will go towards a drilling program of up to 20,000m on Shaw River's tenements in the Pilbara and Ghana in coming months.
"Scoping studies for potential future operations at the Baramine and Ghana projects will be initiated following the capital raising," the statement said.
Hartleys Limited is Broker to the offer.
Shaw River's largest shareholder, Atlas Iron and other shareholders, including OM Holdings are participating in the placement.
"We are delighted by the strong support received for the Placement and by the confidence demonstrated by our shareholders in the Company," said Shaw River managing director Vincent Algar.
"The strength of interest in the Placement ensures Shaw River remains well funded to execute its strategy to build a global manganese business," said Mr Algar.
See company statement below:
Shaw River Resources Limited (ASX:SRR) "Shaw River" "the Company" is pleased to advise that it has resolved to raise up to $3.575 million through a placement of up to 27.5 million shares at an issue price of 13 cents per share to sophisticated and professional investors.
Shaw River will also raise up to $750,000 through a share purchase plan ("SPP") at an issue price of 13 cents a share to shareholders registered at the close of business on Wednesday, 27 October 2010. Major shareholders, Atlas Iron and OM Holdings will, subject to shareholder approval, be offered a top-up right at 13 cents per share to maintain their current percentage interest in the Company.
The funds raised pursuant to the capital raising will be used to fund further exploration on Shaw River's existing manganese tenements in Australia and Ghana. This will include drilling programs of up to 20,000m on Shaw River's tenements in the Pilbara (WA) and Ghana (West Africa) in coming months. Scoping studies for potential future operations at the Baramine and Ghana projects will be initiated following the capital raising.
Hartleys Limited is Broker to the Offer. Shaw River's largest shareholder, Atlas Iron Limited, and other shareholders, including OM Holdings Limited, are participating in the Placement.
Shaw River Managing Director Vincent Algar said the proceeds would enable the company to accelerate exploration at two highly promising projects, enabling Shaw River to generate strong newsflow over coming months.
"We are delighted by the strong support received for the Placement and by the confidence demonstrated by our shareholders in the Company," Mr Algar said. "The strength of interest in the Placement ensures Shaw River remains well funded to execute its strategy to build a global manganese business."
"Drilling will commence imminently in Ghana with results expected before the end of 2010, and we are already well advanced in preparations for our next major drilling programme at our flagship Baramine Project, which will commence in the first quarter of 2011."
The Placement will be issued pursuant to the Company's 15% capacity under ASX Listing Rule 7.1. The SPP and Top-Up Shares will be issued subject to shareholder approval at the Company's Annual General Meeting of shareholders currently scheduled for Tuesday 30 November 2010.
STRATEGY FOR THE BARAMINE PROJECT
Shaw River is seeking to define large-scale manganese resources at Baramine to pave the way for a long-life mining operation. Activity over the coming months will focus on delivering this outcome, which is expected to provide investors with regular newsflow including:
Final drilling results including updated Exploration Targets* expected in November 2010;
Beneficiation test results from RC holes in Area 3, Nells, Area 4 and Area 5 are expected in November 2010 and will assist with orebody modelling and economic product studies;
Exploration planning will be completed with the aim of converting Shaw River's Baramine Project Exploration Target* on key prospects to Mineral Resources in 2011;
Results of beneficiation testing will be followed up during the coming months with a 1,000 metre diamond drilling program to determine beneficiation parameters and product characteristics;
15,000m of RC drilling is being planned to commence in early 2011;
Economic studies will commence in the current quarter; and
Heritage, environmental and mining application processes will commence in early 2011.
*Exploration Targets: Shaw River has determined an initial Exploration Target at Baramine of between 10 Mt and 15 Mt of manganese grading between 18 % Mn and 25% Mn.
Exploration Target Statement:
It should be noted that the potential quantity and grade of the stated Exploration Target are conceptual in nature, that there is currently been insufficient exploration to define a Mineral Resource, and that it is uncertain if further exploration will result in the determination of a Mineral Resource.
ABOUT SHAW RIVER RESOURCES
Shaw River is a focused manganese explorer, currently operating five Pilbara manganese projects, and holding an 80% stake in a Ghanaian manganese and gold project.
Shaw River offers excellent exposure to this strategic metal, critical to the global steel industry. Manganese offers investors the benefits of a high unit sale price, strong global demand and low capital and time costs for the development of feasible projects.
In the remainder of 2010 and into 2011, Shaw River will aggressively advance its projects at its Butre (Ghana), Skull Springs (Pilbara) and Baramine (Pilbara) projects. Shaw River is maintaining its active manganese project acquisition strategy as it continues to build its manganese project pipeline.
Shaw River's largest shareholder, Atlas Iron (45.4%), is a strong supporter of Shaw River's manganese strategy.
