West Perth-based nickel producer Western Areas NL aims to raise $45 million through a non-renouncable entitlements issue to fund expansion of the company's Flying Fox mine and exploration of the company's other nickel projects.
West Perth-based nickel producer Western Areas NL aims to raise $45 million through a non-renouncable entitlements issue to fund expansion of the company's Flying Fox mine and exploration of the company's other nickel projects.
The issue, of one new share for every eight shares held at a price of $2.60, will result in the issue of up to 17.5 million new ordinary shares.
In the event that the maximum subscription is reached, up to $20 million is intended to be made available for exploration and nickel project acquisitions.
The joint lead managers to the offer are Western Area's two main trading brokers, Tricom Equities Limited and Southern Cross Equities Limited. Any shares not taken up by the Rights Issue are expected to be offered to leading Australian and overseas institutions and investors.
Western Areas managing director Julian Hanna said the company was looking at ways to minimise the level of nickel price hedging from the mine, given the current record nickel prices.
"The Rights Issue not only provides shareholders with the opportunity to increase their holdings in the Company but also reduces our requirement for further debt financing which may require additional hedging," said Mr Hanna.
"It will be a significant milestone to have up to $20 million available for exploration. A number of high priority targets will be tested along strike from Flying Fox, along the eastern nickel belt at Forrestania and at the Company's other exploration projects".
Western Areas largest shareholder, Terry Streeter, has advised the Board that he intends to take up his entire available allocation under the terms of the Rights Issue.
The rights issue will open on September 19, and closing October 4.
The full text of a company announcement is pasted below
The Board of Western Areas today announced details for a Non-Renounceable Entitlements Issue ("Rights Issue") offering one new ordinary share for every eight shares held at 5.00pm (WST) 15 September ("Record Date") at an issue price of A$2.60.
The issue price represents an approximate 11% discount to the five day weighted average share price on the ASX prior to the 1st September 2006. If fully subscribed, the offer will result in the issue of up to 17.5 million new ordinary shares, raising proceeds of approximately A$45 million.
The joint lead managers to the offer are Tricom Equities Limited and Southern Cross Equities Limited, currently Western Areas two main trading brokers. Any shares not taken up by the Rights Issue are expected to be offered to leading Australian and overseas institutions and investors.
The majority of funds raised will be used to contribute to the financing of the Flying Fox mine expansion and to significantly increase the level of exploration drilling at Forrestania and at the Company's other nickel exploration projects. In the event that the maximum subscription is reached, up to $A20 million is intended to be made available for exploration and nickel project acquisitions. In addition, funds will be used to complete the Diggers South pre feasibility study and resource expansion drilling program.
- Announced mineral resources at Flying Fox comprise a total of approximately 1.18 million tonnes at a weighted average grade of 6.8% nickel, containing approximately 79,900 tonnes nickel. Drilling is in progress at Flying Fox with the goal of increasing mineral resources to a potential 100,000 tonnes of contained nickel.
- Announced mineral resources at Diggers South comprise a total of 2.0 million tonnes at a weighted average grade of 1.54% nickel, containing approximately 30,500 tonnes nickel. Drilling is in progress at Diggers South with the goal of increasing mineral resources to a potential 45,000 tonnes of contained nickel.
Western Areas Managing Director and CEO, Mr Julian Hanna, said that with current record nickel prices and first ore production from the high grade Flying Fox mine expected in October, the Company is looking at ways to minimise the level of nickel price hedging from the mine.
"The Rights Issue not only provides shareholders with the opportunity to increase their holdings in the Company but also reduces our requirement for further debt financing which may require additional hedging," said Mr Hanna. "It will be a significant milestone to have up to $20 million available for exploration. A number of high priority targets will be tested along strike from Flying Fox, along the eastern nickel belt at Forrestania and at the Company's other exploration projects".
Western Areas largest shareholder, Mr Terry Streeter, has advised the Board that he intends to take up his entire available allocation under the terms of the Rights Issue.
4 September - Lodgement of Prospectus with ASIC and Notification to ASX
6 September - Notice of Rights Issue Sent to Shareholders
8 September - Latest date to buy shares to participate in Rights Issue
11 September - Rights Issue Ex date
15 September - Record Date for determining Entitlement
19 September - Opening Date and Dispatch Prospectus to Shareholders
4 October - Closing Date of Rights Issue - all applications and cheques received
5 October - Shares quoted on a deferred settlement basis
6 October - Advise ASX of any Shortfall
10 October - Deferred settlement trading ends - dispatch date
12 October - Placement of any shortfall
20 October - Proposed AGM date
A copy of the prospectus for the Rights Issue will be mailed to shareholders and applicants will need to complete the application form that will accompany the prospectus. A copy will also be available on the Company's website.