Perth-based metals explorer View Resources Ltd will raise $10.6 million through the placement of 53 million new shares at 20 cents each, to cover short term funding for its Bronzewing gold project, the company has announced.
Perth-based metals explorer View Resources Ltd will raise $10.6 million through the placement of 53 million new shares at 20 cents each, to cover short term funding for its Bronzewing gold project, the company has announced.
The full text of a company announcement is pasted below
View Resources Limited (View) has today received commitments to place 53 million new shares at 20c for $10.6 million to provide the Company with sufficient short term contingency funding for the Bronzewing operation as well as cover the recent unbudgeted cost of de-hedging. These funds were placed within the Company's remaining 15% as per ASX listing rule 7.1 and are not therefore subject to shareholder approval.
The placement, which was over-subscribed, was taken up by institutional and sophisticated investors who took part in the July 2008 placement both in Australia and the United Kingdom, where the Company has built up a strong support base over the past year. Both of View's major shareholders, Austral-Asia Resources and Infrastructural Investments Pty Ltd, a member of the IMC Resources Group, and Lion Selection Limited continue to support the Company and have participated in this placement.
The Board of View considered a number of financing options including a rights issue and possible convertible note.
After reviewing these options the Company elected to undertake this placement as commercially and practically it presented the best alternative. This placement will now allow the Company to remain focussed on the key task of completing the Bronzewing ramp-up during this quarter.
Additionally, the Company has entered into an agreement for a four month review period with its financier, Investec Bank Australia Ltd (Investec), in order to reassess the Bronzewing project. The introduction of the Discovery resource, the extension to the Central pit, and the previous delays in project ramp-up, mean that the original Life of Mine Plan and Base Case Model agreed with View's bankers no longer fully reflects View's current mining position.
As a result, View is working with its bankers to agree an updated Life of Mine Plan and Base Case Model. As part of this process, Investec have the right to conduct a review of the facility and, on 28 February 2008 at their discretion, to request changes to View's loan facility, or accelerate repayment of the loan.
Managing Director Tim Gooch said, "The delays we have experienced in ramping up the Bronzewing project have been disappointing, however we have addressed and resolved or are managing all of the issues we have encountered. The major issue of delayed access to consistent flows of ore from both the undergrounds and pits is being resolved. With ore now starting to report from four different sources stockpiles will grow underpinning the project performance which continues to strengthen as it ramps up to its targeted production levels in this December quarter".
Gooch added, "As always in these situations the ongoing support of our major shareholders is critically important and much appreciated".
With gold at near record high prices and the recent activity in the West Australian nickel sector, and with the Company's Carnilya Hill Nickel Project JV (VRE 30%: Mincor 70%) expected to produce first ore in January, the Company will be well placed in 2008 to take full advantage of the strong resource market, with positive cash flows from both its projects.
