West Perth-based exploration company Western Areas Ltd will earn around $22.6 million in a placement to finance the expansion of the company's Flying Fox mine, as well as further acquisitions.
Canadian investment companies Sprott Securities Inc and BMO Capital Markets will purchase 6.6 million units at a price of C$3 each on an underwritten private placement basis, in a deal worth C$20 million.
Each unit will consist of one ordinary share and 0.25 of a share purchase warrant, with a whole share purchase warrant allowing for an additional ordinary share purchase at C$4.00 for a period of 36 months following the closing of the offering.
The full text of a company announcement is pasted below
Western Areas NL is pleased to announce that it has entered into an agreement with Sprott Securities Inc. and BMO Capital Markets pursuant to which the Underwriters have agreed to purchase from the Company 6,666,667 Units at a price of C$3.00 per Unit on an underwritten private placement basis (the "Offering') for a total of C$20 million. Each Unit shall consist of one ordinary share and one-quarter of a share purchase warrant. Each whole share purchase warrant shall entitle the warrant holder to acquire one additional ordinary share at an exercise price of C$4.00 for a period of 36 months following the closing of the Offering.
The Underwriters shall also have the option to purchase up to an additional 1,333,333 Units at the same issue price of C$3.00 per Unit on the closing date of the Offering for an additional C$4 million. The Offering is scheduled to close on or about December 7, 2006 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX.
The net proceeds of the Offering will be used to contribute to the financing of the Flying Fox mine expansion, for projects and corporate acquisitions, to assist in restructuring Western Areas' nickel hedge position, to increase exploration drilling at the Forrestania nickel project as well as for general corporate purposes.
The securtities described herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Act or unless an exemption from registration is available.
