Metallica Minerals to raise $4.9 million

THE BOURSE WHISPERER: Multi-commodity resource development company, Metallica Minerals has announced a fully underwritten renounceable rights issue to raise approximately $4.9 million.

Funds raised will be used to advance two of the company’s key minerals projects in Queensland.

These are the NORNICO nickel, cobalt and scandium project northwest of Townsville and the Weipa zircon/rutile minerals sands project on Cape York.

In the announcement Metallica said the structure of the capital raising will deliver its shareholders dual benefits.

The first being an underwritten renounceable rights issue the second the ability to directly own shares in listed Queensland gold and copper play, Planet Metals.

Metallica currently holds approximately 76% of the issued shares in Planet Metals.

The renounceable rights issue is fully underwritten by RBS Morgans Corporate Limited.

Under the terms of the Renounceable Rights Issue, Metallica shareholders are offered:
– One (1) Metallica Rights Issue share for every 10 Metallica Shares currently held plus Two (2) shares in Planet Metals Limited (ASX-PMQ) (Offer Securities) for each Metallica Rights Issue share subscribed for;
– Metallica shareholders will be able to trade their rights to their entitlement on the ASX;
– An aggregate Issue Price for the Offer Securities of 42 cents.

This compares to the closing price for Metallica on the ASX on Thursday June 9 of $0.345 per share and for Planet Metals of $0.095 per share.

On the structure of the Offer, the 42 cent aggregate Issue Price represents a 21.5% discount to the total value of $0.535 of one Metallica share and two Planet shares on the identified night’s closing price.

No new Planet Metals shares are offered in the capital raising and the sale by Metallica of some of its Planet shares is limited to a maximum of 23.4 million Planet shares.

Metallica Minerals chairman David Barwick, said the capital raising would reduce the company’s current 76% stake (45.4 million shares) in Planet Metals’ issued capital to ~37% or 22.0 million of Planet’s 59.7 million ordinary shares on issue.

Metallica’s shares on issue will rise by 11.7 million to 128.7 million.

“The ability to structure the capital raising this way is one of the benefits of Metallica having built up a spread of direct investments in other Queensland minerals houses and/or commodities,” Barwick said.

“It means Metallica can raise funds at an attractive price to its shareholders, sell some of its shares in Planet Metals to Metallica shareholders so they have direct ownership in another explorer, and the company still retains a significant direct interest in Planet Metals’ gold and copper prospectivity at Mount Cannindah and Mount Borium.

“One of the other outcomes of the raising will be increased liquidity for Planet Metals in which Metallica will continue to retain a significant one third or so stake.”

The record date for the Offer is 21 June and it is due to close on 8 July. Completion of the transfer of Planet Metals shares and the commencement of trading on the ASX of the new shares is expected by 19 July.

Mr Barwick said the bulk of the proceeds – about $3 million – would be assigned to progressing and completing current metallurgical, pit optimisation, processing, and evaluation and feasibility studies at the Company’s wholly-owned NORNICO tri-metal project.