Funds across the Boards

THE FUND RAISER: Some bigger numbers this week as the juniors boosted their bank balances.

Capital Raising

Sovereign Metals (ASX: SVM) will place up to 15.25 million ordinary shares at 22 cents each to sophisticated investors, to raise $3.35 million before costs.

Aterra Capital, a key investor and substantial holder in the company with 10.5 per cent of the existing shares, will subscribe for 1.35 million new shares.

The funds raised from this placement will be used to expedite the exploration and development of Sovereign’s Central Malawi graphite project, and for general working capital and business development purposes.

Debt reduced by $59 million

Discovery Metals (ASX: DML) and its lenders have agreed to reduce the company’s existing interest bearing debt by US$59 million (10.5 cents per share) and re-profile repayments of outstanding debt.
 
In summary the debt re-profile involves:

A reduction in gross interest bearing debt (including capitalised interest) from US$159 million (outstanding balance) to US$100 million (new balance);

A waiver of all continuing defaults under the Project Finance Facility and the Revolving Credit Facility;

A 12 month standstill on principal and interest payments and together with all covenant testing other than a minimum cash balance;

Interest rate to be LIBOR plus 5 per cent with interest capitalised until September 2018;

An extension to the term of the loan, with scheduled repayments commencing in September 2018 and ending in June 2023; and

An incentive payment to the lenders of no more than US$20 million from 30 per cent of net cash flows after the new balance is fully repaid.

“The Debt Re-Profile with the company’s lenders brings certainty to Discovery Metals,” Discovery Metals chairman Jeremy Read said.

“With the significant reduction in overall debt and an effective 12 month standstill in place, Discovery Metals can now focus exclusively on its operating strategy to transition the Boseto project to underground mining and in doing so supply the processing plant with consistent higher grade, higher recovery sulphide copper ore and commence the Zeta Underground Mine.

$3.1m share placement

Elemental Minerals (ASX: ELM) has received placement commitments to raise $3.1 million at 25 cents per share from sophisticated and institutional investors.

“The successful raise, at a premium to the market price, is particularly pleasing given the tough market conditions experienced by junior miners. Elemental Minerals CEO Iain Macpherson said.

“The quality and strategic nature of the Sintoukola project, has ensured that we were able to secure this funding, which coupled with the recent transaction through which Harlequin, one of the company’s founding shareholders, acquired Pala’s stake in full at a very significant premium of 34.07 cents per share, puts the company firmly on course to execute on its recently announced new development strategy and conclude negotiations with a strategic partner that will enable future development of the project.”

Working Capital Funding completed

Hazelwood Resources (ASX: HAZ) has executed all formal documentation required in respect of a US$4 million working capital loan facility provided by specialist resource investment fund, Siderian Resource Capital Limited.

The drawdown of this Working Capital Facility remains subject only to the company completing a placement to raise no less than $1.5 million, for which the company has received firm commitments for $1.5 million.

“We are delighted to have further strengthened our business relationship with our global sales agent, Wogen through the completion of this Working Capital Facility with Siderian, a vehicle in which Wogen has an investment,” Hazelwood Resources managing director Terry Butler-Blaxell said.

“We see this funding as representing a significant step forward in the progress of the company, greatly improving the financial flexibility of the business as it continues to grow its share of the global ferrotungsten market, as well as providing a number of other benefits whilst minimising dilution for our shareholders.”

Initial DFS funding secured

Excelsior Gold (ASX: EXG) has accepted a credit approved offer of up to $4 million via a convertible loan facility from Macquarie Bank.

The facility will provide working capital to complete a Definitive Feasibility Study over the Kalgoorlie North gold project.

The DFS will evaluate construction of a new standalone one million tonnes per annum treatment plant and other possible toll milling and joint venture scenarios.

“Excelsior Gold views this facility as recognition of the technical and financial merits of the project,” Excelsior Gold managing director David Hamlyn said.

“The facility is well timed for the commencement of a Definitive Feasibility Study for the project and prudent in the current market conditions.”