19/03/2014 - 10:43

Wolf raises $183m for Hemerdon

19/03/2014 - 10:43

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Wolf Minerals has arranged final funding for construction of its Hemerdon tungsten and tin project in England after agreeing to a discounted share placement.

Wolf raises $183m for Hemerdon

Wolf Minerals has arranged final funding for construction of its Hemerdon tungsten and tin project in England after agreeing to a discounted £99 million ($183 million) share placement.

Perth-based Wolf told the market it had agreed to issue about 608 million shares at 30 cents per share, which represents a 33 per cent discount to the company's 20-day volume weighted average price as of last week.

The company also plans to raise a further $2 million through a share placement plan at the same issue price.

Wolf said the funds would allow it repay its $US75 million bridge finance facility with major shareholder Resource Capital Fund and to fulfil its capital expenditure requirements on the Hemerdon project, while also providing ongoing working capital and producer shortfall guarantees.

Wolf has put its remaining capital expenditure requirements at $158.4 million, excluding contingency costs.

RCF and Wolf's other major shareholder, Todd Corporation, have agreed to subscribe for a combined 488 million shares.

This will lift RCF's stake in Wolf as high as 41.8 per cent, while Todd's stake will increase to up to 32.5 per cent, depending on the uptake of the share placement plan.

In addition, the company has issued 120 million shares under a placement, jointly maanged by Patersons Securities, Numis Securities, Investec Bank and Petra Capital.

Azure Capital acted as corporate advisor to Wolf.

"We are delighted with the success of the fundraise and thank all participants for their support," Wolf managing director Russell Clark.

Completion of the capital raising is conditional upon conditions including shareholder approval at an extraordinary general meeting, expected to be held in May.

Wolf announced in January a substantial increase in capital and operating costs for the Hemerdon project, which is now budgeted to cost $230 million to develop.

The capital cost estimate has increased by 15.5 per cent since completion of the project’s bankable feasibility study in 2011, while the project’s operating cost has increased by 3.7 per cent.

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