Raising funds can be half the battle
THE FUND RAISER: One company this week showed us that even though you can raise the cash, doesn’t necessarily mean you’ll get to spend it.
Return of Funds from Conditional Placement
Middle Island Resources (ASX: MDI) has advised the market that efforts to negotiate acceptable terms to acquire a majority interest in the Samira Hill gold mine and mill failed to reach a commercial outcome by the 31 October 2013 deadline.
As a consequence, the A$5 million received and held on trust from the Conditional Placement will be returned to investors. Likewise, the company will no longer proceed with the proposed Share Purchase Plan (SPP).
Despite the efforts of the Middle Island team, the Niger Government has sought to modify commercial terms originally agreed between Middle Island and the vendor and, despite concessions made by Middle Island, the proposed new terms remain outside what the company deems commercially viable.
Middle Island views its surrounding exploration permits as being critical to the commercial longer-term viability of the project.
In the present circumstances, Middle Island remains receptive to an approach from the current project owners for the company to purchase a majority interest, which Middle Island views as a value-add acquisition opportunity for shareholders, subject to agreement on terms that deliver upside potential commensurate with risk.
The Board acknowledges the support of, and expresses its gratitude to, those shareholders and new investors that endorsed the company’s efforts in this planned acquisition.
The Board will continue to pursue compelling transactions to maximise the value to shareholders, as well as advance the company’s existing gold exploration and development projects in West Africa.
$83.5 Million Placement
Sirius Resources (ASX: SIR) is hoping to raise approximately $83.5 million in a placement to domestic and international institutional and sophisticated investors.
The placement of approximately 34 million shares will be issued at a price of $2.44 per share, a less than 5 per cent discount to the 5 day volume weighted average price.
Funds raised will be primarily used for:
– Fast tracking of exploration: Western Trend and other nickel targets, Fraser Range gold targets and Polar Bear;
– Potential project acquisition and/or Nova Bollinger project development costs; and
– General working capital.
“Following completion of the placement Sirius will have an exceptionally strong balance sheet, enabling the company to aggressively explore the new targets around the Nova Bollinger nickel copper project, to complete the feasibility study and to move into the project development stage,” Sirius resources managing director Mark Bennett said.
“We are pleased with the overwhelming demand and support for the placement from a range of high-quality domestic and international institutional investors.”
Rights Issue to raise up to $5.5 million
Manas Resources (ASX-MSR) has proposed to undertake a partially underwritten, pro-rata non-renounceable entitlement issue to shareholders on the basis of one new share for every two shares held at the record date at an issue price of four cents per share to raise approximately $5.5 million together with one free attaching option (exercisable at eight cents each on or before 31 March 2015) for every share issued.
The funds raised will be used for the Shambesai gold project pre-development and development costs, including plant design, engineering, environmental impact studies and approvals, land acquisition, government and community relations, site works, and project finance due diligence costs, ongoing exploration and working capital.
Halcyon Corporate and Patersons Securities have been appointed Joint Lead Managers to the Rights Issue.
“I am delighted with the support shown by the Directors, management and the Lion Selection Group for the Rights Issue,” Manas Resources managing director Stephen Ross said.
“The level of support shown pays testament to the attractiveness of the low-cost, high-margin Shambesai gold project.
“The funds raised will allow Manas to progress the development of Shambesai, as we move towards finalising project financing and commencing construction next year.”
The company’s directors and senior management have agreed to subscribe for their entitlements (totalling approximately $112,000) and in addition will enter into sub-underwriting arrangements for up to $421,000 of any shortfall to the Rights Issue.
In addition, the company’s leading institutional shareholder the Lion Selection Group, holding approximately 7.7 per cent, has indicated it will subscribe in full for its entitlement under the Rights Issue.