31/10/2007 - 15:49

View shares suspended amid $10m placement speculation

31/10/2007 - 15:49

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View Resources Ltd has suspended its shares amid speculation of a $10 million placement, roughly equal to 10 per cent of its current market capitalisation.

View Resources Ltd has suspended its shares amid speculation of a $10 million placement, roughly equal to 10 per cent of its current market capitalisation.

Managing director Tim Gooch said he couldn't comment on what course current financing negotiations could take.

Yesterday directors Jyn Sim Baker and Gerrit de Nys stood down as directors of the board pending a refinancing proposal from IMC Resources (Australia) Pty Ltd, the company's main shareholder which they represent. Trade was also halted in the company's shares.

Yesterday the company said: IMC is currently negotiating a possible financing proposal with View and in order for these Directors to continue these negotiations and remain without conflict they have tendered their resignation.

View said both of these directors have expressed their desire to rejoin the board once all relevant negotiations are completed and there is no longer any conflict of interest.

Earlier in the month View proposed a $10 million rights issue to be fully underwritten by IMC, to fund its Bronzewing ramp up. View was also said it was in discussions to restructure its debt, possibly using a convertible note issue.

 

Below is an announcement from October 3:

View Resources proposes to undertake a rights issue to raise $10 million. The Company's major shareholder Austral-Asia Resources and Infrastructural Investments Pty Ltd, a member of the IMC Resources Australia Group ("IMC") has indicated an intention to fully underwrite the proposed rights issue, subject to the terms being finalised and a formal underwriting document being agreed.
In parallel with negotiations for underwriting the proposed rights issue, View Resources is in discussions with IMC in relation to securing a more appropriate debt facility which may include a convertible note to replace the current Investec loan.
Full details of the rights issue and new debt facility (subject to shareholder approval if required) will be announced to ASX in due course
Progressing this new funding via the proposed rights issue and restructuring the current debt facility will allow View to focus on Bronzewing as it completes its ramp up during the December quarter. Forecast production for the quarter is 30,000 ounces, moving Bronzewing into positive cash flows by the end of the calendar year.
In parallel the Company's nickel Joint Venture at Carnilya Hill is also making good progress and is set to start delivery of ore by the end of 2007. This will see View deriving positive cash flows from both operations by mid 2008.
Whilst the Company believes that it has overcome many of the key operational issues at Bronzewing the additional funding is required to cover the recent cancellation of its hedging and to have a contingency whilst the Project completes its ramp-up and moves into a consistent cash positive position. It is proposed that this will be done by the rights issue which will allow all shareholders to participate.
IMC have been a long-term supporter of View and it shares the Company's strategic goal of becoming a mid-tier mining house. This latest step confirms their willingness to work with View to position the Company in the best possible manner going forward to achieve its goals.
View's Managing Director Tim Gooch re-affirmed "that whilst we have certainly encountered first hand the difficulties of ramping up a project in the current market, we are confident that Bronzewing is now at a position where the modelled tonnes and grade are starting to flow from all sources and we are close to achieving a steady state of operations. The improving performance at Bronzewing and our recent de-hedging places the Company in a position where it can move forward to take advantage of a rising gold price, and continue to build a stronger Company"

 

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