PERTH (miningweekly.com) – South Australian metals developer Havilah Resources has secured up to A$100-million in funding from Sanjeev Gupta’s GFG Alliance, through one of its members SIMEC Mining.
The funding will be provided through a series of equity placements in Havilah, at a premium of up to 35%, over a three-year period, potentially providing GFG with a 51% stake in Havilah, if all the equity placements are made.
Following the equity placements, GFG could potentially acquire direct equity interests in Havilah’s iron-ore assets.
‘The proposed transformational transaction is the culmination of extensive discussions and technical cooperation between Havilah, SIMEC and GFG since the middle of 2018,” said Havilah chairperson Mark Stewart.
“This cooperative and patient approach to explore alternatives, test ideas and understand value propositions has paid off with a clear win-win outcome for both parties.
“It demonstrates a shared view of the inherent value of Havilah and its potential, combined with GFG’s confidence in the long-term growth prospects inherent in Havilah’s extensive tenement package in the Curnamona Craton.”
Funds from the placement will go towards corporate and administrative costs, a number of project work programmes, exploration and development costs, particularly of the Mutooroo copper/cobalt project following the delivering of a positive definitive feasibility study.
On completing the initial placement of A$6-million, GFG would be given the right to nominate one director to the Havilah board. On reaching a 30% interest in the company, GFG will be able to nominate an additional independent director, and upon reaching a 45% interest in the company, the company can nominate a further two directors, one of whom must be independent.
Gupta on Wednesday said that the transaction with Havilah was a great opportunity for GFG to build upon a partnership to help realise its vision for its Next-Gen steel plant, and for its Whyalla transformation project, as well as realising South Australia’s copper potential.
The transaction will be subject to shareholder approval, and Havilah obtaining a waiver from the ASX to permit the issue of shares to GFG over a period of more than three years.