Apex receives backing of Andrew Forrest-led investment vehicle

THE BOURSE WHISPERER: The newly-established board of Apex Minerals has lined up new financial backing from The Metal Group, a privately-owned investment vehicle controlled by Fortescue Metals Group non-executive chairman Andrew Forrest.

The Metal Group recently provided a $4 million short term debt facility and has since undertaken further due diligence on Apex, its operations and prospects.

The new agreement will result in The Metal Group being issued an option package to acquire up to a 19.9 per cent fully-diluted interest in Apex for an investment of up to $17.95 million.

The exercise price of the option package represents a 50 per cent premium to the 20 cents per share (post consolidation) issue price of a recently completed $22.2 million rights issue.

“We are pleased to have secured the strategic and financial support of Andrew Forrest and The Metal Group as we undertake the task of restoring Wiluna’s profitability for the benefit of Apex shareholders,” Apex Minerals executive chairman Eduard Eshuys said in the company’s announcement to the Australian Securities Exchange.

“We believe that strategic advice about the company’s future direction and the ability to utilise the network of the Metal Group which has achieved a strong track record of building value in the minerals industry will bring real benefits to Apex shareholders.”

For the next three years The Metal Group will provide Apex with strategic advice in relation to future investor marketing, financing and corporate activities including potential acquisitions and joint ventures.

In return for providing the services outlined above, and subject to shareholder approval, Apex will issue The Metal Group approximately 55.3 million unlisted options exercisable at 30 cents per share at any time within three years of the date of issue.

Apex exec chairman Eshuys is also set to benefit from the transaction along with Drummond Gold, of which Eshuys is executive chairman, in consideration for their respective roles in its facilitation.

Apex will seek shareholder approval for the grant of an additional approximate 35.3 million and 9.2 million unlisted options respectively to Drummond Gold and Eshuys on the same terms as those issued to The Metal Group.

Upon issue of the options to The Metal Group, Drummond Gold and Eshuys, their respective fully diluted holdings in Apex Minerals are expected to be as follows:

 

Source: Company announcement

To approve the proposed issue of share options Apex will convene a general meeting of shareholders, which is expected to be held during June 2012.