Western Mining to raise A$6m
Thursday, October 29 2015 - 01:57 AM WIB
ASX-listed Western Mining Network (WMN) announced Thursday that it has secured a placement of A$6 million from Lanstead Capital LP, a UK institutional investor, which provides funding for the key elements of the company?s near-term growth strategy.
WMN said in a statement that under the terms of the placement, Lanstead will subscribe for 30,000,000 ordinary shares to be issued at a price of A$0.20 per share, representing a 25 percent premium to the company?s last traded price.
Lanstead will also subject to the satisfaction of certain conditions, receive 7,500,000 options to acquire ordinary shares at a price of A$0.27 per share exercisable on or before June 30, 2017. In addition, the company has entered into a sharing agreement with Lanstead which enables the company to secure much of the potential upside arising from any share price appreciation above $0.27 over the next 18 months.
WMN said it will retain A$900,000 of the aggregate A$6,000,000 subscription price and the remainder will be provided as security to Lanstead for the sharing agreement, with the first payments under that agreement being received 60 days after the closing.
The sharing agreement provides that the company will receive 18 monthly cash settlements determined by WMN?s share price performance as measured against a benchmark price of A$0.27 per share. If the share price exceeds the benchmark price, for that month, the company will receive more than 100 per cent of the monthly settlement due on a pro rata basis.
WMN said there is no upper limit placed on the additional amounts receivable by the company as part of the monthly settlements. Should the share price be below the benchmark price, the company will receive less than 100 per cent of the expected monthly settlement on a pro rata basis.
In no event would a decline in the company's share price result in any increase in the number of ordinary shares received by Lanstead or any other advantage accruing to Lanstead. The broad effect of the arrangements is that, if the 18 month VWAP of the company's shares following the date of the deal is A$0.27, the company should receive approximately A$6,000,000 in total including the initial payment of A$900,000. It will receive more if the average price is above A$0.27, and less if the average price is below A$0.27.
The company has agreed to make a value payment to Lanstead of 3,000,000 ordinary shares in consideration for the sharing agreement. Following completion of the investment Lanstead will hold 33,000,000 ordinary shares in the company which represents approximately 16.68% of WMN's enlarged issued share capital.
WMN said the net proceeds raised will be used to fund the company's existing business plan including scoping and market studies, the construction and operation of the company?s first pilot plant and research into the potential on-shoring of advanced beneficiation techniques, the upgrade of SRK?s JORC report for the Balai Sebut deposit in Central Kalimantan as well as general working capital support.
Editing by Reiner Simanjuntak