Western Australian diversified miner Straits Resources Ltd has announced a $50 million capital raising to pursue its growth and expansion plans.
Western Australian diversified miner Straits Resources Ltd has announced a $50 million capital raising to pursue its growth and expansion plans.
It will raise $45 million, via a placement of 10.9 million shares at $4.10 per share, and an additional $5 million through a separate share purchase plan.
The company says funds raised will be used to maintain its strong growth profile through new project development and operational expansions, as well as to increase its rapidly growing resource and reserve inventory.
Record coal, gold and copper prices contribute to the planned expansions having the capacity to add significant further earnings and value to Straits shareholders.
Straits' intention is to maintain a logical sequence of expansion and project growth while maintaining a low level of gearing.
The placement, managed by Austock Corporate Finance Ltd, has been made to new and existing institutional and sophisticated investors, and strong demand resulted in the placement being significantly oversubscribed.
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$50 million raising to underpin further strong company growth
Straits Resources Limited ("Straits", ASX:SRL) announced today that it had successfully undertaken a
placement of 10,975,610 million shares at $4.10 per share to raise $45 million before costs.
The placement, which was undertaken via a bookbuild process, was managed by Austock Corporate
Finance Limited. The clearing price of $4.10 per share was at the top end of the bookbuild range.
Demand from both domestic and international investors was very strong resulting in the placement
being significantly oversubscribed resulting in large scalebacks. Settlement and allotment of all shares
under the placement will occur on 19 May 2006.
The Company also intends to undertake a Share Purchase Plan (SPP) of up to $5m which is to be
underwritten by Austock Corporate Finance. Under the SPP each eligible shareholder will be entitled to
apply for up to $5,000 of Straits ordinary shares at a price of $4.10 per share. The record date for the
SPP is 11 May 2006. Details of the SPP will be contained in documentation which will be sent to
shareholders shortly.
On completion of the placement and SPP, Straits will have approximately 176,993,430 ordinary shares
on issue. Participants in the placement represent a broad range of institutional and private investors
from Australia, Asia and Europe which has enabled Straits to introduce a number of new shareholders
onto the register.
The net funds raised under the placement will be used to maintain the company's strong growth profile
through new project development and operational expansions, as well as to increase the company's
rapidly growing resource and reserve inventory.
With record prices for coal, gold and copper, the key commodities in the group, the contemplated
expansions are forecast to add significant further earnings and value to Straits shareholders.
Straits' intention is to maintain a logical sequence of expansion and project growth while maintaining a
low level of gearing.
The placement has been made to new and existing institutional and sophisticated investors pursuant to
Section 708 of the Corporations Act 2001. All of the shares issued under the placement will rank pari
passu with existing ordinary shares.
About Straits Resources
Straits is a diversified resources company focused on generating strong and sustainable earnings for its
shareholders from a balanced portfolio of resource projects.
Based in Perth, the company has a management team with an impressive track record of advancing
resource projects through to full production. Straits controls and operates the Sebuku Coal Operation in
Indonesia, the Whim Creek Copper Operation in Western Australia and the Mt Muro Gold Operation in
Indonesia.
In addition, Straits holds an outstanding portfolio of mining investments (including its current 58.62%
interest in listed copper producer Tritton), development projects and exploration ground throughout
Australia and Indonesia.