Vimy in $22m funding injection

Resource Capital Funds is set to emerge with a near 30 per cent stake in Vimy Resources when the uranium company completes a $22 million capital boost to fund ongoing work at its Mulga Rock project in the eastern Goldfields.

Perth-based Vimy will seek shareholder approval for the conversion of a $15 million loan with RCF into equity.

It will also undertake a $7.6 million capital raising, with $6.6 million to be raised through the placement of shares, while the remaining $1 million will be raised by way of a share purchase plan.

The price of the raising has been set at 26 cents per share, representing a 13.6 per cent discount to Vimy’s 10 day volume-weighted average price.

RCF will also participate in the raising, with $3.1 million committed.

The conversion of the loan coupled with the participation in the placement will boost RCF’s stake in Vimy to 29.9 per cent, up from its current 7.9 per cent shareholding.

“The conversion of all debt into equity greatly improves the company’s capital structure and provides greater financial flexibility for the business into 2017,” Vimy managing director Mike Young said.

“We are once again very pleased to have RCF’s ongoing support.

“Our world-class Mulga Rock project continues to demonstrate that simple mining and extraction processes will achieve excellent results.

“The definitive feasibility study remains on time and within budget to be completed in Q1 2017, and our focus is shifting to offtake contracts and funding.”

Canaccord Genuity acted as lead manager to the raising.

Vimy shares were 3.7 per cent lower to 26 cents each ahead of the close of trade.