A$60m raising to help Western Desert achieve 3Mt/y production rate
PERTH (miningweekly.com) – Northern Territory-based iron-ore miner Western Desert Resources on Tuesday announced a A$60-million entitlement offer to fund working capital, to settle derivate hedge liabilities and to repay short-term working capital bridge funding, which it expected to draw down before the end of April.
The renounceable entitlement offer would be conducted on a 6 for 25 basis, and shares would be issued at a price of 50c each. The issue price represented a 15.3% discount to Western Desert’s last closing price on March 6.
CEO Norm Gardner said on Tuesday that the entitlement offer would strengthen the company’s balance sheet and allow Western Desert to reach its targeted three-million-tonne-a-year production rate by June of this year.
Meanwhile, Western Desert on Tuesday downgraded its short-term shipping forecasts for March and April from its Roper Bar mine, in the Northern Territory, as the miner faced poor weather conditions and a slower-than-expected loading rate.
Shipments during January and February were affected by the loading rate, prompting Western Desert’s barging contractor to increase tug capacity by mid-January.
The company noted that while the deployment of the additional hardware did see a gradual increase in tonnage barged, the overall result expected was not achieved. In addition, adverse weather conditions also limited capacity.
Western Desert told shareholders that it now expected to ship some 120 000 t during March and 180 000 t during April, before achieving its full production levels of 250 000 t in May and June, which would continue to be delivered through the dry season.
The miner has also taken the decision to appoint a new barging operator.
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