Western Desert chooses capital raising in lieu of debt
PERTH (miningweekly.com) – Iron-ore developer Western Desert would raise some A$30-million in a share placement to sophisticated and institutional investors to replace a revolving credit facility provided by Noble Resources.
Around 46.15-million new ordinary shares were issued at a price of 65c each to raise the funds.
In addition, Western Desert said on Friday that it would launch a share purchase plan, under which shareholders could subscribe for up to A$15 000 in new shares. It placed a cap of A$15-million on the share purchase plan.
“The board decided that our working capital requirements were better managed by way of equity, rather than expensive debt including commercial terms that we consider are not in our long-term interest,” said Western Desert chairperson Rick Allert.
MD Norm Gardener added that the company was now fully funded to complete the development of its Roper Bar project, with first shipment due in late November.
“We are on budget for all development costs, with around 25% of those remaining,” he said.
Gardener noted that the company’s total bank debt would not exceed A$85-million, which for an iron-ore project producing some three-million tonnes a year, was very low by industry standards.
Noble Resources would continue on as offtake partner.
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