PERTH (miningweekly.com) – ASX-listed Alliance Resources is hoping to raise about A$4.96-million through a nonrenounceable rights issue, offering shareholders two new shares for every 11 shares held, at 8c each.
The rights issue represented a 23.8% discount to the company’s last closing price and a 27.2% discount to the 15-day volume weighted average price.
Each shareholder would also be entitled to one attaching new option for every new share subscribed for, which would be exercisable at 15c each and would expire at the end of September next year.
Alliance said on Tuesday that the funds raised would be used for the November cash call from the Four Mile uranium project, which was due in December, to maintain its participating interest in the project, as well as court-appointed costs owed to Quasar and Heathgate relating to court proceedings against the two companies.
The funds would also be used for general working capital.
“We believe the rights issue is well priced for our exiting shareholders, and that the funds raised, if fully subscribed, should see Alliance through to first revenue,” said MD Steve Johnston.
Alliance has previously made the decision not to contribute the 2015 capital expenditure planned for the Four Mile uranium project, in South Australia, after joint venture partner Quasar passed the 2015 programme and budget without the company’s support.
In November, Alliance lodged a grievance with the Supreme Court of Australia against Quasar Resources in an effort to gain control of its production share from the Four Mile mine after Quasar announced plans to stockpile all the 2014 and 2015 production from the mine, thereby generating no revenue in 2015.