PERTH (miningweekly.com) – Iron-ore junior Flinders Mines is hoping to raise A$14.52-million through a one-for-six non-renounceable entitlement offer, priced at 2.5c a share.
The entitlement offer would consist of more than 580.86-million shares, and would be issued on the basis of one new share for every six existing shares held, and would be open to eligible shareholders in Australia and New Zealand.
The offer price represented a 24.7% discount to Flinder’s five-day volume weighted average share price for the period ending March 30.
The ASX-listed company said on Tuesday that the proceeds from the entitlement offer would be used to repay the A$7-million unsecured loan from major shareholder TIO’s subsidiary, which is due at the end of April this year, as well as fees associated with the BBI Group transaction, and to provide working capital.
Should the proceeds of the placement prove to be insufficient for Flinders to repay the unsecured loan in full while retaining a minimum A$3-million working capital, the loan would be partially repaid and a second capital raise would be considered to ensure the balance is paid by the end of June this year.