Panax completes share placement

Australian-listed Panax Geothermal Limited has finalized shares placement worth A$770,000 in the company at a price of 2 cents per share. The placement of shares was managed by Taylor Collison Limited.

All new shares issued under the placement will also receive listed options on a 1-for-2 basis, with a strike price of 4 cents per share, with a three-year term.

The shares and listed options being issued under the placement are on consistent terms with the shares and listed options issued under the company?s recent Renounceable Rights Issue.

Under the terms agreed by Panax and Taylor Collison for Panax?s recent Rights Issue capital raising, Taylor Collison had the right to place up to an additional $1 million in equity in Panax, subsequent to the completion of the rights issue. The placement of $770,000 has been completed on this basis.

Given the size of the current placement, shareholder approval is not required as it is within the 15% placement limit prescribed by the Listing Rules. The placement was made to institutional and sophisticated investors and clients of Taylor Collison.

Since 1 July 2011, Panax has bolstered its available cash reserves by approximately $3.7 million, through the completion of renounceable rights issue worth $2.0 million; receipt of the final installment under its Geothermal Drilling Program Grant for the Salamander-1 well at Penola, worth $350,000; receipt of a cash rebate, amounting to $550,000 million; and the completion of current placement.

The proceeds of the equity raising, in conjunction with existing cash reserves, will be used to advance Panax?s portfolio of near-term geothermal development opportunities in Indonesia. The cash reserves will also be used for working capital purposes and provide the certainty in commencing the development of the company?s advanced portfolio of geothermal projects in Indonesia.

Panax has set up an Alliance Agreement with PT Bakrie Power, a subsidiary of Bakrie Group, to cooperate on near-term geothermal development and production projects in Indonesia.

Panax?s portfolio has the capacity to produce more than 300 megawatts of clean electricity generation, with approximately 165 megawatts net to Panax.

Each of Panax?s Indonesian projects, Sokoria, Ngebel and Dairi Prima, are underpinned by agreed, commercially attractive power tariffs with agreed power off-take agreements.

The company is also undertaking a number of other capital raising initiatives to advance and develop the company?s Indonesian project portfolio. The company expects to finalize these discussions during the coming weeks. (romel)