THE BOURSE WHISPERER: ASX-listed Indian Sandalwood producer TFS Corporation has priced an offering in the international markets to raise US$150 million.

TFS has over 4,500 hectares of Indian Sandalwood trees established in the Kimberley region of Western Australia.

The money will be raised through the issue of 11% Senior Secured Notes due 2018 and Warrants (Options) to purchase ordinary shares.

The settlement of the offering of the Notes is expected to occur in New York on 21 June 2011 and is subject to customary closing conditions.

TFS intends using the net proceeds from the offering in potential land acquisitions and for general corporate purposes, including other Indian Sandalwood acquisition opportunities and potential corporate acquisitions.

“At the closing of the offering, 50% of the net proceeds (US$75m) will be deposited into an escrow account that restricts use of the cash in the account (“Restricted Cash”),” the company said in an announcement.

“One-third of the Restricted Cash will become available for use upon TFS receiving shareholder approval for the issue of the Options. The remaining two-thirds of the Restricted Cash will become available once specific sales targets have been met for Beyond Carbon institutional sales.

“The Notes will be issued by TFS and will be guaranteed by 10 of its subsidiaries. The Notes will be secured by substantially all the assets of TFS and its subsidiary guarantors.”

Investors participating in the offering will receive 370 Options for each US$1,000 principal amount of the Notes purchased, resulting in a total of 55.5m Options to be issued.

Each Option will be exercisable for one ordinary share at a price per share of A$1.28 (a 40% premium to the 30 trading day volume weighted average price preceding the pricing of the offering), subject to adjustments permitted under the ASX Listing Rules. The Options will expire on 15 July 2018.

The issuance of the Options is subject to TFS shareholder approval at a general meeting that is expected to be held in late July or early August 2011.

TFS said its largest shareholder, with a holding 16.31% of the company’s ordinary shares, has agreed to vote to approve the issuance of the Options.
In the event that shareholder approval for the issue of the Options is not obtained by 15 July 2012, then special interest on the Notes would commence accruing until the Options are issued.

THE BOURSE WHISPERER: The regular game of musical chairs continues within the boardrooms across the resources industry. The Whisperer pokes his head down the corridors of power to take a quick look at some of the chairs to have recently been vacated and to find out which ones have been filled:

ZYL Limited director resignation and company secretary appointment 

Emerging metallurgical coal producer ZYL Limited announced the appointment of Nicholas Ong as company secretary, effective as of 15 June.

Ong was a principal adviser at the Australian Securities Exchange in Perth and brings seven years’ experience in listing rules compliance and corporate governance to the board.

Ong was an active member of the ASX JORC Group and has overseen the admission of over 100 companies on to the official list of the ASX.

ZYL also advised of the resignation of Gino  D’Anna as executive director and company secretary to pursue other business interests.

D’Anna has been involved with ZYL since its reinstatement to quotation on 4 March 2010 and has been instrumental in the execution and progression of the Kangwane Project in South Africa.

Groote Resources Appoints managing director

Groote Resources has appointed Lloyd Jones to the position of executive managing director.

The appointment becomes effective from 20th June, coincidental with the first meeting of the Groote board at Darwin and commencement of operations from the company’s new headquarters there.

Jones has been a non-executive director of the company since February this year.

“The appointment of Lloyd Jones to take on the lead management role of the company at this important time in the company’s development is a significant step,” Groote Resources chairman Doug Daws said in the company announcement.

“Lloyd brings an impeccable record in government, mining and exploration management with him.”

Jones has been employed as the Manager of Community Relations for a large Queensland based private coal exploration and mining company with extensive operations in the Moranbah Coal Basin. His role covered all aspect of Cultural Heritage, Native Title and land access.

Allied Gold plays board room bingo

The board room chairs at Allied Gold Limited were on high rotation following the announcement of proposed changes to the company’s executive management team.

Current executive chairman, chief executive officer and founder of the company, Mark Caruso, will move into the role of non-executive chairman.

Current executive director and chief financial officer Frank Terranova will move to the role of chief executive officer and managing Director.

Terranova has been with Allied Gold for over three years and has served on its board for over two years.

Stephen Kelly, having previously served as Allied Gold’s group financial controller and group finance manager will take on the role of chief financial officer.

Peter Williams has recently joined Allied Gold as group general manager operations to oversee the company’s major production assets at Simberi in PNG and Gold Ridge in the Solomon Islands.

Most recently Williams was managing director and chief operating officer of ASX-listed Focus Minerals. He started his mining career with Bougainville Copper in 1971 and has broad international and minerals industry experience.

These changes will come into effect following the company’s proposed admission to the Main List of the London Stock Exchange.

THE DRILL SERGEANT: White Rock Minerals has received assay results for its Mt Carrington gold-silver project in northern New South Wales, which the company says, may suggest potential extensions to the current Inferred Mineral Resources at the shallow Strauss and Kylo deposits.

The Strauss and Kylo gold deposits are located on the central Mining Leases held by White Rock at Mt Carrington.

These deposits, along with the Guy Bell deposit, contain combined Inferred Mineral Resources of 2.68 million tonnes at 1.9 grams per tonne gold for 162,000 ounces.

The Resources are located immediately beneath and adjacent to shallow open pits, which were mined in the late 1980’s.

The company has released the results from seven drill holes that include a number of high grade gold intercepts.

At the Strauss deposit, drilling has defined a new zone of gold mineralisation 30 metres below the current Inferred Resource and within 100 metres of surface.

Results from two holes drilled at Strauss include:

SRDD005:
22m at 2.2 g/t Gold from 100m including
0.5m at 8.7 g/t Gold from 102.5m
1m at 17.8 g/t Gold from 108m
5m at 3.3 g/t Gold from 115m

SRDD006:
3m at 9.3 g/t Gold from 87m including
1m at 18.6 g/t Gold from 89m
and
10m at 2.2 g/t Gold from 110m including
1m at 14.3 g/t Gold from 113m

At nearby Kylo, drilling has also confirmed depth extensions to the Inferred Resource.

Results from Kylo include:

KYDD007:
2.4m at 2.9 g/t Gold from 93.5m
1m at 2.8 g/t Gold from 120m
3m at 2.9 g/t Gold from 127m

KYDD008:
2.58m at 8.6 g/t Gold from 10.42m including
1m at 18.6 g/t Gold from 12m
and
3m at 3.8 g/t Gold from 109.5m

“These very encouraging results are a strong indication of the levels of gold mineralisation we are aiming to define in our resource extension drilling,” White Rock Minerals managing director Geoffrey Lowe said in the company announcement.

“The current drilling is based on targets defined by a recently completed resource validation study with the aim of both expanding and upgrading the Inferred Resource base, which currently stands at 190,000 ounces of gold and 10.5 million ounces of silver.

“At Strauss, the discovery of a new zone of gold mineralisation immediately beneath the Inferred Resource is particularly promising and confirms our belief that continued systematic drilling of the main gold corridor can define new gold and silver zones, with a resultant increase in the Resource base.”

White Rock carried out a validation study on Strauss and Kylo, which was designed to review the geological and grade block models for the gold and silver Resources. This study was completed in May.

The study provided a number of positive indications for expansion of the Resource base through targeted drilling, and also provided guidelines on the drilling necessary to both expand and upgrade the current Resource base.

The current drilling program was designed to test for shallow extensions to the Strauss and Kylo Inferred Resources, confirm the existence of a new gold zone interpreted to be located beneath the Strauss Resource (based on limited historical drilling), and test a discrete geophysical IP target 100 metres to the south of the Strauss open pit.

THE DRILL SERGEANT: Western Australian gold exploration play Southern Cross Goldfields has received results from a recently completed drilling program undertaken at the company’s 100 per cent owned Marda gold project.

Infill drilling has returned a series of wide, high grade intersections from close to surface at the Golden Orb deposit located 15km south-west of Marda.

The recent drilling returned new near surface gold intersections at Golden Orb, which included:

– 5 metres at 15.9 grams per tonne Gold from 29m, including 3m at 25.8g/t Gold
– 4m at 9.5g/t Gold from 32m, including 2m at 17.2g/t Gold
– 4m at 10.5g/t Gold from 39m, including 2m at 18.7g/t Gold
– 4m at 9.0g/t Gold from 17m, including 1m at 28.4g/t Gold
– 6m at 5.6g/t Gold from 22m, including 2m at 14.9g/t Gold
– 5m at 7.8g/t Gold from 8m, including 3m at 11.1g/t Gold
– 3m at 8.8g/t Gold from 33m, including 2m at 11.2g/t Gold

Southern Cross said the results add strength to the potential for Golden Orb to deliver an early source of high-grade feed from an open pit operation, which it will use to feed a proposed centrally located 400,000 tonnes per annum processing facility at Marda Central.

“Previously reported infill drilling results highlighted the near surface and deeper potential at Golden Orb,” Southern Cross said in an announcement.

“The new results…have highlighted the strength of the mineralisation in the upper part of the deposit.”

Drilling programs that Southern Cross has carried out to date at Golden Orb have focussed on bringing the deposit into the JORC Measured and Indicated Mineral Resource categories from its current Inferred standing to enable any resulting Ore Reserve to be incorporated into the company’s gold production strategy.

The mineralised system at Golden Orb ekes out along one kilometre in strike with potential extensions to the existing resource along strike and at depth.

According to the company mineralisation at Golden Orb outcrops at surface and continues to the current extent of drilling approximately 150 metres below surface.

Southern Cross will incorporate the latest results into a revised JORC Mineral Resource estimate to be undertaken once all assay results are received.

“Golden Orb continues to deliver very pleasing upside results from what is mostly an infill drilling program designed to support our feasibility study and production plans,” Southern Cross Goldfields managing director Glenn Jardine said in the company announcement.

“In many respects, it has been the discipline of conducting systematic infill drilling that has enabled us to uncover the substantial upside at several of our deposits, including Golden Orb.”

Jardine went on to explain the positive exploration implications for the company stemming from the latest results at Golden Orb.

“In some cases we have seen excellent results in proximity to historic intersections that may not have been viewed favourably from a potential production viewpoint,” he continued.

“These new results allow us to view other prospects in our tenement package in a new light.

“While it is very encouraging to see these sorts of grades and widths in a near surface location, it is too early to comment definitively on the significance of these in terms of enhancing our future production profile.

“What we can say is that this material should be readily accessible via open pit operations, potentially providing an early source of cash flow from our operations at Marda.”

 

THE BOURSE WHISPERER: Central Europe-focused ASX-listed Underground Coal Gasification play Wildhorse Energy has entered into agreements with institutional and sophisticated private investors who will undertake a placement of just over 22.6 million ordinary shares at an issue price of 31 cents per share, in order to raise gross proceeds of $7 million.

The placement, undertaken by GMP Europe Securities LLP, sees Genesis Asset Managers, which Wildhorse described as, “a prominent and long established investment manager in the Central European energy sector”, in its announcement take a strategic five per cent interest in the company on behalf of its clients.

Wildhorse will use the funds primarily to advance its Mecsek Hills gas (UCG) project in Hungary.

This will include the conclusion of the pre-feasibility study, targeted for the third quarter this year and completion of the first UCG project site selection.

Wildhorse said the funds will also provide working capital to allow the company to capitalise on its first mover advantage in the European UCG/unconventional gas market and advance the development of the Mecsek Hills uranium project.

“We are reaching a critical time in the development of our flagship Mecsek Hills gas (UCG) project as we near completion of the PFS, and we are naturally delighted with the support we have received,” Wildhorse Energy managing director Matt Swinney said in an announcement.

“In particular, Genesis is a long established and successful investor in the European energy sector and has invested in Hungary for over 15 years.

“Additionally, it has exposure to leading companies specialising in coal conversion technologies, which affords Genesis a good understanding of the general coal gasification and UCG process.

“Having already received strong initial indications regarding the positive economics of supplying syngas to power stations from the project, the next few months will be highly active as we complete our UCG site selection, drilling and 3D seismic programs, with a view to moving into Bankable Feasibility stage by the end of 2011.”

The Wildhorse strategy is to become a major supplier of gas feedstock to power stations in Central Europe.

The company’s project development strategy is based primarily upon acquiring strategic UCG sites in key locations in Central Europe where gas markets are dominated by Russian gas imports, energy security is a major factor for governments and large scale industrial consumers of gas while gas prices are correspondingly high.

The expansion is underpinned by the development of the Mecsek Hills uranium project.