Gulf to raise A$2.5m funds for manganese project
Tuesday, April 22 2014 - 01:10 PM WIB
ASX-listed Gulf Minerals Corporation Limited announced on Tuesday plans to raise up to A$2.5 million through the issue of up to 250 redeemable convertible notes at a value of $10,000 per note to sophisticated and professional investors.
The term of the notes will be three years from the date of issue and will pay an interest rate of 10 percent per year. Subject to standard shareholder approval, each note may be converted at the noteholder?s election into fully paid ordinary shares in the company at the rate of 85 percent of the 30 day Volume Average Weighted Price calculated as at the date the noteholder elects to convert. Notes may be redeemed after 12 months from the date of issue with 3 months notice.
The funds raised from note issue will be used to finalize the engineering design and consulting costs of its planned smelter; to satisfy transaction costs in relation to the planned listing on the Singapore Stock Exchange of its fully owned subsidiary International Manganese Limited (IML); and to support its working capital.
The company, through IML, is developing an ASEAN focused manganese alloy producer. The facilities, based in Indonesia, will take advantage of the low cost of ore, labor and power being the majority of operating costs.
Production will be a premium quality 78 percent manganese alloy resulting from the unique qualities of the Indonesian high-grade low impurities manganese ore.
It is proposed to build eight furnaces over a three-year period for a total capital cost of A$36 million funded by a A$25 million IPO of IML on the Catalist Board of the Singapore Stock Exchange in the second half of 2014 and operational cashflow.
The first two furnaces will be built during 2015, coming online January 2016, with a further four online January 20 17 with the final four online January 2018. Each furnace has a capacity of 20,000 tons of medium carbon ferro manganese alloy using existing proven smelter technology. Power will be supplied by a third party on a user pay basis for less than 9 cents/kilowatt hour.
Editing by Johannes Simbolon