Realm Resources raises $15 million from shares placement

Australian miner Realm Resources Ltd said that it has completed the placement of 95.93 million fully paid ordinary shares in the capital of Realm at an issue price of $0.091 per share to Taurus Funds Management Pty Ltd (Taurus), institutional and sophisticated investors.

The company raises approximately $8.73 million from the shares placement. Acting as joint lead managers were Veritas Securities and Patersons Securities

As a result of the placement, Taurus will become a key investor of the company holding 53.08 million shares, representing a 19.9 percent interest in the company.

In addition, Taurus has agreed to provide Realm with a zero coupon loan of $5.17 million to be repaid on or before 12 January 2012 through the issue of 56.81 million shares at a deemed issue price of $0.091 per share.

?We are delighted to have secured the funding package and welcome Taurus as a cornerstone investor as Realm embarks on an exciting new phase of development aimed at becoming a significant coal producer,? said Realm?s Managing Director Richard Rossiter.

Earlier, the company entered into an option and share sale agreement, granting an exclusive option to acquire 100 percent of the issued capital in Kalres Limited (Kalres), a company incorporated in the Cayman Islands.

The sellers have subsequently agreed with Realm to receive 12.087 million shares (at a deemed issue price of $0.091) per share, pending to the approval of its shareholders and a cash payment of $250,000 in lieu of the original cash consideration.

Katingan Ria acquisition
The fund raising paves the way for the acquisition and development of the Katingan Ria coal project with first production targeted by mid 2012.

Kaires is a party to the Master Agreement, under which Kalres can acquire up to a 75 percent interest in an Indonesian coal company, PT Katingan Ria (PTKR), which holds the Katingan Ria concession. The Katingan Ria Project is an advanced thermal coal exploration project located in Central Kalimantan.

Next Steps
Realm said that due diligence on the Katingan Ria Project and PTKR is well advanced.

Following completion of the company?s due diligence investigation and satisfaction of the outstanding Tranche 1 Conditions Precedent, Realm intends to proceed with the acquisition of 51 percent interest in PTKR.

Thereafter, a commercial feasibility study on the Katingan Ria Project will be refined with the aim of bringing the Katingan Ria Project into production by mid 2012.

In addition PTKR will continue to seek the Pinjam Pakai Exploitation license in respect of 1,500 hectares in the southern part of the Katingan Ria Project as part of Tranche 2 under the Master Agreement. (romel/roffie)