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Services or for dissemination in the United States
Mr Robert Friedland and Mr Jiang Zhaobai, Co-Chairmen of Clean TeQ
Holdings Limited (
Clean TeQ or
Company) (ASX:CLQ) (TSX:CLQ) (OTCQX:CTEQF), and Mr
Sam Riggall, Chief Executive Officer today announced that the
Company is conducting an underwritten institutional placement to
raise a minimum of A$150m at A$1.15 per share. Proceeds from
the Placement will be used to fund early works and long lead items
to accelerate the development of its 100% owned Clean TeQ Sunrise
Nickel/Cobalt/Scandium Project (
Sunrise or the
Project), located 350km west of Sydney.
The expedited development timetable is expected
to provide Clean TeQ with the opportunity to commence production of
high purity cobalt and nickel sulphate approximately 12 months
earlier than previously contemplated, allowing the Company to take
advantage of rapidly growing markets for these critical inputs into
the lithium ion battery industry.
Placement
The Placement will comprise an underwritten
placement of a minimum of approximately 130 million new shares at
an issue price of A$1.15 per share (Offer Price)
to institutional, accredited, sophisticated and professional
investors under relevant prospectus exemptions. The Placement is
being underwritten by Macquarie Capital (Australia) Limited and BMO
Capital Markets on terms and conditions customary in Australia for
a transaction of this nature.
The Placement will be conducted via two
tranches.
- An unconditional tranche of approximately 87 million shares,
issued pursuant to ASX Listing Rule 7.1 (Tranche
1); and
- A conditional tranche of at least approximately 44 million
shares (Tranche 2) which will be subject to a
shareholder approval at a vote to be held at a general meeting in
April 2018.
Clean TeQ will also offer eligible shareholders
in Australia and New Zealand the ability to apply to subscribe for
up to A$15,000 of new shares at the Offer Price, via a Share
Purchase Plan (SPP), details of which will be made
available to eligible shareholders in due course.
The Offer Price represents a:
- 6.1% discount to the closing price on the ASX of A$1.225 per
share on 7 March 2018, being the last trading day prior to
announcement of the Placement
- 6.4% discount to the 10-day volume-weighted average price
(VWAP) on the ASX of A$1.229 per share up to 7 March 2018, being
the last trading day prior to announcement of the Placement
Pengxin Group retains its anti-dilution rights
pursuant to the Subscription Agreement signed between it and Clean
TeQ in February 2017.
Settlement of Tranche 1 of the Placement is
scheduled to occur on 14 March 2018. Tranche 2 of the Placement is
subject to shareholder approval at a General Meeting to be held on
or around 18 April 2018 and is scheduled to settle on or around 20
April 2018. New shares issued under the Placement will rank equally
with existing Clean TeQ shares.
The Placement and SPP are also subject to the
approval of the Toronto Stock Exchange (TSX). The
Company intends to rely on the exemption under Section 602.1 of the
TSX Company Manual with respect to the approval of the Placement
and SPP, and any shares to Pengxin under its anti-dilution right.
Any new shares under the Placement settled into Canada will be
subject to a statutory 4-month hold period.
Use of Proceeds
On 5 October 2016 the Company announced the
results of a pre-feasibility study for the Project which outlined a
plant and infrastructure construction timeframe estimated to be
three years. The long lead items which were the determining
factor behind the three-year construction timeframe were the
autoclaves which, sourced via new fabrication, at the time of the
pre-feasibility study, had an estimated design, fabrication,
delivery and installation schedule of three years.
On 25 July 2017, Clean TeQ announced that it had acquired two
autoclaves from Vale International S.A., a subsidiary of Brazilian
multinational metals and mining group, Vale SA, for US$6.5
million. The autoclaves have now been shipped to Australia
and successfully unloaded at Port Pirie, where they will be stored
before being transported by road to the Project.
The early acquisition of these critical long lead items for the
Project provides the Company with the opportunity to significantly
compress the overall construction schedule. Subject to making
commitments now for early works and procurement of further long
lead items, the Company has the potential to further accelerate the
Project development schedule by up to 12 months, reducing the total
construction timeframe to approximately two years from the point of
a final investment decision (FID). The
expedited development timetable will allow Clean TeQ to take
advantage of the rapidly growing markets for battery grade nickel
and cobalt sulphate.
Specifically, between now and FID targeting late
2018, proceeds from the Placement will fund:
- Detailed engineering and design work for the process plant and
associated infrastructure;
- Long lead item procurement including deposits for the acid
plant, generators and fabrication of special material
equipment;
- An infill drilling program to better define areas of higher
cobalt grade material, targeting the ability to increase cobalt
production over the first 10 years of the mine life; and
- Early site works including earth works, infrastructure,
construction camp and utilities.
The Company has reserved the right to accept
additional applications for new shares if market demand for the
Placement exceeds the minimum underwritten amount of A$150 million.
Any such additional shares will form part of Tranche 2 of the
Placement. Any oversubscriptions will be applied towards:
- Additional early works which may further de-risk the Project
development schedule;
- Project construction costs post-FID; and
- General corporate purposes and working capital.
Following completion of the Definitive
Feasibility Study in Q2 2018, and subject to a favourable FID,
formal site construction works are expected to commence in early
2019 with production, commissioning and ramp-up targeted to
commence in early 2021.
Following completion of the Placement (assuming
the minimum underwritten amount is raised), Clean TeQ’s pro-forma
cash balance is expected to be approximately A$192m (pro-forma as
at 31 December 2017).
Financing Plan
The Company has taken a number of recent steps
towards securing the financing required to develop the Project, a
necessary pre-condition to a favourable FID.
In late 2017, the Company appointed four leading financial
institutions, National Australia Bank, Société Générale, and
Natixis, and Industrial and Commercial Bank of China (ICBC) as
Mandated Lead Arrangers (MLAs) (see ASX
announcements of 2 November 2017 and 7 December 2017) to arrange
and syndicate a finance facility targeting debt funding for a
significant proportion of the total development cost of the
Project, including working capital and other credit
facilities.
Collectively, the MLA group are undertaking to
make best efforts to provide a total of US$500 million for the
proposed total credit facilities required for the development of
the Project, including a debt facility to fund capital expenditure
and working capital and other credit facilities including bonds and
bank guarantees. The financing will be contingent upon completion
of a successful due diligence process, credit approval and
agreement of formal documentation of terms and conditions.
In August 2017, the Company signed a binding
offtake agreement with Beijing Easpring for fixed tonnages
representing approximately 20% of cobalt and nickel sulphate
production from the Project over the first five years of
production. Additionally, Clean TeQ continues to engage with
several other potential customers for offtake from Clean TeQ
Sunrise as well as possible project-level investment.
Should the debt financing and additional
project-level investments be successfully concluded, those
financing initiatives, together with the offtake workstreams and
this equity raising would significantly advance the Company towards
securing the capital required for development of Clean TeQ
Sunrise.
Commentary
Clean TeQ’s Co Chairman, Mr Robert Friedland,
commented: “The electric vehicle revolution continues to gain
momentum, and Clean TeQ Sunrise is ideally placed to become a large
scale, low-cost supplier of the key raw materials required for the
production of lithium ion battery cathodes.”
Clean TeQ’s Chief Executive Officer, Mr Sam
Riggall, commented: “There is exceptional interest in the battery
raw material supply chain. Through this raising, when coupled with
the progress made on securing long-term project debt support, the
Company is now well positioned to develop Clean TeQ Sunrise into
one of the world’s leading suppliers of cobalt and nickel
sulphate.
Following completion of the capital raising, the
Company will be in a strong position to rapidly accelerate project
development through detailed engineering and construction planning,
as well as to secure some of the key long lead items which will
allow us bring forward production.”
Share Purchase Plan (SPP)
Eligible retail shareholders with addresses in
Australia and New Zealand will be invited to participate in the SPP
up to a maximum of A$15,000 per shareholder. Participation in the
SPP will be open to all eligible holders of Clean TeQ shares as at
the record date of 7 March 2018. The SPP will open on 16 March 2018
and close at 5:00pm (Melbourne time) on 18 April 2018. The SPP is
not underwritten.
The issue price under the SPP will be equal to
the Offer Price. Shares issued under the SPP will rank equally with
the Company’s existing ordinary shares on issue. No brokerage or
transaction costs will be payable by subscribing shareholders.
Further details on the SPP will be released on the ASX and
distributed to eligible Clean TeQ shareholders in Australia and New
Zealand in due course.
The theoretical maximum number of shares that
can be issued under the SPP is 78 million, based on all eligible
shareholders (being shareholders with a registered address in
Australia or New Zealand) subscribing for their full entitlement
under the SPP. Clean TeQ reserves the right to cap the SPP below
the theoretical maximum number of shares at its absolute
discretion.
Indicative Timetable
Event |
Date1 |
Trading halt and announce Placement and SPP |
Thursday 8 March 2018 |
Announcement of outcome under Placement |
Friday 9 March 2018 |
SPP Record Date |
7.00pm, Wednesday 7 March 2018 |
Settlement of new shares issued under Placement Tranche 1 |
Wednesday 14 March 2018 |
Allotment and trading of new shares issued under Placement Tranche
1 |
Thursday 15 March 2018 |
SPP opens |
Friday 16 March 2018 |
General Meeting to approve Placement Tranche 2 |
Wednesday 18 April 2018 |
SPP closes |
Wednesday 18 April 2018 |
Settlement of new shares issued under Placement Tranche 2 |
Friday 20 April 2018 |
Allotment of new shares issued under SPP and Placement Tranche
2 |
Monday 23 April 2018 |
Dispatch of holding statements |
Tuesday 24 April 2018 |
1 The above timetable is indicative only and subject to change.
Clean TeQ, in conjunction with the Joint Lead Managers, reserves
the right to amend any or all of these events, dates and times
subject to the Corporations Act 2001 (Cth), the ASX Listing Rules,
the TSX Company Manual, and other applicable laws. All times and
dates are in reference to Melbourne time. |
|
Clean TeQ shares will remain in a trading halt
pending completion of the Placement.
Additional Information
Nothing contained in this announcement
constitutes investment, legal, tax or other advice. You should seek
appropriate professional advice before making any investment
decision.
Macquarie Capital (Australia) Limited and BMO
Capital Markets are acting as Joint Lead Managers, Underwriters and
Bookrunners for the Placement. Baker McKenzie is acting as
legal adviser to Clean TeQ in relation to the Placement.
For more information about Clean TeQ
contact:
Richard Glass, Investor Relations (Australia)+61
3 9797 6781
Evan Young, Investor Relations (North America)+1
647 808 2141
About Clean TeQ Holdings Limited
(ASX:CLQ) – Based in Melbourne, Australia, Clean TeQ is a
global leader in metals recovery and industrial water treatment
through the application of its proprietary Clean-iX® continuous ion
exchange technology.
For more information about Clean TeQ please
visit the Company’s website www.cleanteq.com.
About the Clean TeQ Sunrise
Project – Clean TeQ is the 100% owner of the Clean TeQ
Sunrise Project, located in New South Wales. Clean TeQ Sunrise is
one of the largest cobalt deposits outside of Africa, and one of
the largest and highest-grade accumulations of scandium ever
discovered.
About Clean TeQ Water – Through
its wholly owned subsidiary Clean TeQ Water, Clean TeQ is also
providing innovative wastewater treatment solutions for removing
hardness, desalination, nutrient removal, zero liquid discharge.
The sectors of focus include municipal wastewater, surface water,
industrial waste water and mining waste water.
For more information about Clean TeQ Water please
visit www.cleanteqwater.com
NOT FOR RELEASE OR DISTRIBUTION IN THE
UNITED STATES
This announcement does not constitute an offer to
sell, or a solicitation of an offer to buy, any securities in the
United States or in any other jurisdiction in which such offer
would be illegal. The ordinary shares to be issued under the
Placement and the SPP have not been, and will not be, registered
under the United States Securities Act of 1933 (the US
Securities Act) or under the securities laws of any state
or other jurisdiction of the United States. Accordingly, such
shares may not be offered or sold to persons in the United States
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the US Securities Act
and applicable state securities laws.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release
constitute “forward-looking statements” or “forward-looking
information” within the meaning of applicable securities laws. Such
statements involve known and unknown risks, uncertainties and other
factors, which may cause actual results, performance or
achievements of the Company, the Clean TeQ Sunrise Project, or
industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements or information. Such statements can be
identified by the use of words such as “may”, “would”, “could”,
“will”, “intend”, “expect”, “believe”, “plan”, “anticipate”,
“estimate”, “scheduled”, “forecast”, “predict” and other similar
terminology, or state that certain actions, events or results
“may”, “could”, “would”, “might” or “will” be taken, occur or be
achieved. These statements reflect the Company’s current
expectations regarding future events, performance and results, and
speak only as of the date of this new release.
Statements in this news release that constitute
forward-looking statements or information include, but are not
limited to: statements regarding the completion of the Placement
and SPP; statements regarding the use of proceeds of the Placement;
and the development and construction timetable of the Project and
the delivery of certain long lead-time items for the Project,
statements regarding the completion of the project debt financing
and project level investments, statements regarding the
participation of Pengxin Group in exercising its anti-dilution
rights, and statements regarding oversubscriptions. Readers are
cautioned that actual results may vary from those presented. All
such forward-looking information and statements are based on
certain assumptions and analyses made by Clean TeQ’s management in
light of their experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors management believe are appropriate in the
circumstances. These statements, however, are subject to a variety
of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those projected
in the forward-looking information or statements including, but not
limited to, unexpected changes in laws, rules or regulations, or
their enforcement by applicable authorities; changes in investor
demand; the results of negotiations with project financiers; the
failure of parties to contracts to perform as agreed; changes in
commodity prices; unexpected failure or inadequacy of
infrastructure, or delays in the development of infrastructure, and
the failure of exploration programs or other studies to deliver
anticipated results or results that would justify and support
continued studies, development or operations. Other important
factors that could cause actual results to differ from these
forward-looking statements also include those described under the
heading "Risk Factors" in the Company's most recently filed Annual
Information Form available under its profile on SEDAR at
www.sedar.com.
Readers are cautioned not to place undue
reliance on forward-looking information or statements.
Although the forward-looking statements
contained in this news release are based upon what management of
the Company believes are reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with these
forward-looking statements. These forward-looking statements are
made as of the date of this news release and are expressly
qualified in their entirety by this cautionary statement. Subject
to applicable securities laws, the Company does not assume any
obligation to update or revise the forward-looking statements
contained herein to reflect events or circumstances occurring after
the date of this news release.