Shares in West Perth-based Territory Iron rose strongly today after the company raised $30 million through a share placement to Crawley Resources Ltd, jointly owned by Noble Group Ltd and Michael Kiernan.
Shares in West Perth-based Territory Iron rose strongly today after the company raised $30 million through a share placement to Crawley Resources Ltd, jointly owned by Noble Group Ltd and Michael Kiernan.
Territory expects the placement, of 60 million shares at 50c each, to fully fund the remaining costs of its Frances Creek Iron Ore project in the Northern Territory.
After the completion of the placement, Mr Kiernan will be invited to join the company board as a non-executive director.
Territory shares closed up 18 per cent at 46c each.
The full text of a company announcement is pasted below
Territory raises A$30m in placement to Crawley Resources
Highlights:
- Territory Iron agrees to a placement of 60 million shares to Crawley Resources at 50 cents per share to raise A$30 million.
- The placement is in two tranches, comprising 20 million fully paid ordinary shares and a second tranche of 40 million fully paid ordinary shares, requiring shareholder approval.
- The placement is expected to fully fund the estimated remaining costs to bring the Company's Frances Creek iron ore project into production as well as allow exploration of the Company's tenements to be accelerated.
Northern Territory-based iron ore company Territory Iron has agreed to place 60 million shares with Crawley Resources Limited ("Crawley") at 50 cents per share to raise $30 million.
The placement price represents a premium of 35 per cent above Territory Iron's average share price of 37 cents during the last two months.
The placement is expected to fully fund the estimated remaining costs to bring the company's Frances Creek iron ore project into production, as well as allow exploration of the company's tenements in the Northern Territory to be accelerated.
The company expects to be in production by the end of May, with shipping scheduled in August. Territory Iron aims to produce 1.5 million tonnes per annum at full production.
Crawley is a company jointly owned by Hong Kong-based, Noble Group Limited ("Noble") and its associates and Michael Kiernan. Noble holds 70 per cent equity in Crawley, with the remaining 30 per cent owned by Mr Kiernan.
Noble Group Ltd, is a market leader in managing the global supply chain of agricultural, industrial and energy products. Noble operates in over 42 countries serving more than 3,000 customers. Between them Noble and Mr Kiernan have significant experience in the development and operation of Australian bulk mining operations and the marketing of bulk mineral products into Asia.
Under the terms of the agreement, the new shares will be allotted in two tranches:
Tranche 1, comprising twenty (20) million fully paid ordinary shares to raise $10 million, will be issued under the Company's 15% placement capacity (pursuant to ASX Listing Rule 7.1) and is expected to be completed within the next three (3) business days;
Tranche 2, comprising forty (40) million fully paid ordinary shares to raise $20 million, requires shareholder approval, and is expected to be completed within three (3) business days of the Company receiving that approval.
Tranche 1 will give Crawley an initial holding in Territory Iron of 12.9%. Tranche 2 will increase Crawley's holding to 30.8%.
Upon completion of Tranche 1, Mr Kiernan will be invited to join Territory Iron's Board in a non-executive director capacity.
Territory Iron Managing Director Doug Stewart said: "This placement to Crawley and the ensuing appointment of Mr Kiernan to Territory Iron's Board not only provides the Company with funding but brings onboard a respected, successful and energetic miner to add his expertise to the further development of Territory Iron.
"The Board and management of Territory Iron look forward to the opportunity of working with Mr Kiernan and welcomes Crawley to its register and Crawley's vote of confidence in the Frances Creek iron ore project."
A notice for the shareholders' meeting to approve Tranche 2 is expected to be sent to all shareholders in the Company in early March, with the meeting expected to be held in early April. As Tranche 2 will result in Crawley holding more than 20 per cent of the Company, the Notice of Meeting will include an Independent Expert's Report assessing the fairness and reasonableness of the transaction to shareholders.
