THE BOURSE WHISPERER: Winmar Resources has pocketed $2.18 million as part of a placement of $3 million by PXSteel International Asia Corporation Limited.
The placement is via 15 million ordinary Winmar shares at $0.20 per share, which represents a 100 per cent premium to the company’s share price, as at close of trade on 8 February 2012.
PXSteel is due to pay the remaining $820,000 will be paid by PXSteel on receipt of an independent expert’s report and shareholder approval.
Winmar said it will schedule an Extraordinary General Meeting soon in order to do so.
These requirements need to be met because PXSteel’s shareholding in Winmar is set to exceed 20 per cent on completion of the deal
Winmar indicated it would be using the funds to fast track its exploration program at the Hamersley iron project, in the Pilbara region of Western Australia.
The funds it has received so far cover the company’s 2012 exploration and development commitments under the Joint Venture Agreement in relation to the Hamersley project.
Winmar said the completion of the placement will put it in a position to complete its 51 per cent earn-in to the Hamersley project ahead of schedule.
“The company is delighted to have completed this phase of the placement, and welcomes PXSteel as a key strategic investment partner in Winmar’s plans to develop the Hamersley project,” Winmar Resources said in its ASX announcement.
“Winmar has confirmed a $2.2 million exploration budget for 2012 and has engaged specialist minerals exploration and geological service group Terra Search to manage the exploration program at the Hamersley project.”
“Terra Search has a strong depth of experience in the iron ore sector, having previously worked with Dynasty Metals Australia, Atlas Iron and Polaris Metals, among other companies.”
The placement transaction will result in Ms Tu Juan, a director and vice-president of Jiangxi PXSteel Industrial Co., Ltd joining the Winmar Board as a non-executive director.