PERTH (miningweekly.com) – ASX-listed WA Kaolin will raise A$12-million through a share placement and share purchase plan (SPP), as well as a secured working capital loan facility, to fund Stage 1 of its Wickepin kaolin project.
The company will place more than 33.8-million shares in a single tranche, at a price of 18c each, raising an initial A$6.1-million. The issue price represents a 10% discount to the company’s last closing price, and a 12.6% discount to its five-day volume weighted average share price.
Under the SPP, eligible shareholders will be allowed to subscribe for up to A$30 000 worth of additional shares in the company, also at a price of 18c each. The SPP will open on February 16, and will close on March 2.
To support the company’s ramp-up of Stage 2 development, WA Kaolin has also secured a loan facility of A$5-million provided by its Top 5 shareholder, Gordon Martin. The A$5-million facility has a maturity date of three years from the date of advance at an interest rate of 8% per annum, payable quarterly in arrears. A registered mortgage will be granted over the company’s East Rockingham property as security for this loan.
WA Kaolin on Wednesday told shareholders that the installation and pre-commissioning of Stage 1 processing plant at Wickepin kaolin project remains on time and on budget. All process equipment is fabricated and currently on site, and installation is due for completion by the end of the first quarter.
First production from Stage 1 is on track for the second quarter, with production to commence at 25 t an hour nameplate capacity and steadily increasing to a rate of around 200 000 t/y by the end of 2022.
Throughout the development of Stage 1, WA Kaolin’s Kwinana proof of concept plant has continued operating with kaolin shipments seeding and developing markets. As such, the company is experiencing unprecedented demand for its Stage 1 targeted production as new potential clients continue to emerge.
Due to this strong customer demand, elements of Stage 2 capital expenditure of around A$4-million have been brought forward into the current Stage 1 construction phase, to take advantage of cost savings and to shorten lead-time to implement the next increase of production capacity from 200 000 t/y to 400 000 t/y.
“We are thrilled to be in the position to be able to facilitate the acceleration of Stage 2 through the successful completion of Stage 1 on time and within budget and the company’s foresight in implementing some of the Stage 2 infrastructure during Stage 1 commissioning,” said CEO Andrew Sorensen.
“Our initial Stage 2 capex was estimated at A$13.6-million, as per our definitive feasibility study, and contemplated as being funded out of Stage 1 cashflow. Inflationary impacts largely as a result of the Covid-19 pandemic have cautioned the company to provide a contingency for an additional A$2.4-million in Stage 2.
“Based on around A$4-million spent on Stage 2 during Stage 1 and the fact that the company has achieved Stage 1 work to date on time/on budget, Stage 2 is likely to be brought on stream in less than 12 months for an additional circa A$12-million,” said Sorensen.
“This is a fantastic result for the company and its shareholders, and I wish to thank both existing and new investors that have supported the company through this capital raising, in particular one of our largest shareholders, who has provided us with a A$5-million secured working capital loan facility, through his company, Boneyard Investments.”