Macarthur Minerals Limited
(ASX: MIO)
(TSX-V: MMS) (OTCQB: MMSDF) (the
“Company” or “Macarthur”) is pleased to announce the completion of
a material financing package (“Financing Package”) comprising:
- a private placement to be completed
in two tranches (the “Offering” or “Private Placement”) of AUD
6,249,446 million with institutional and sophisticated investors;
and
- a standby equity commitment to
provide up to AUD 20 million in equity financing (“Equity Finance
Facility”), which can be drawn at the discretion of the
Company.
Cameron McCall, President and Executive
Chairman of Macarthur Minerals commented:
“We are delighted with the interest in the
placement which is a strong endorsement from the investment
community. With iron ore prices continuing to defy broader global
impacts from the COVID-19 pandemic, investor demand in the
placement demonstrates market confidence continues to build around
Macarthur and its ability to deliver the Lake Giles Iron Project
for shareholders.
That confidence is pleasing, but it is also
matched by the determination of the Board and Management to ensure
that every opportunity is maximised to deliver Macarthur’s
high-grade, low impurity magnetite product with the development of
one of the first new-generation magnetite mines in Western
Australia.
The completion of this Financing Package is
material for the Company. Balance sheets “open doors”, and as
Macarthur approaches the next phase of key negotiations to deliver
its Feasibility Study for the Lake Giles Iron Project, the
flexibility that the package will provide to the Company is
extremely important.
Bolstering the Company’s balance sheet, (in
combination with the release of all debt under the recently
converted convertible notes) places the Company on a strong footing
and positions Macarthur well as it moves through the next critical
phases of project delivery and as its targets simultaneous
completion of the main project financing strategy for the Lake
Giles Iron Project with EAS Advisers.”
Details of the Financing Package are set out
below.
Overview of
Financing
Package
Private Placement
The Company has received firm commitments from
sophisticated and institutional investors to subscribe for a total
placement of 11,362,629 fully paid ordinary shares (“New Shares”)
at a price of AUD 0.55 per share for a total consideration of AUD
6,249,446.
Each placement unit (“Unit”) is comprised of one
New Share and one attaching whole option to acquire one fully paid
ordinary share in the Company (each, an "Option"). Each attaching
Option has an exercise price of
AUD
0.90, with an expiry date that is 24 months from the date of
issuance.
The placement price per New Share represents a
7.08% discount to the 30 day volume weighted average price (“VWAP”)
of the Company’s Australian Stock Exchange (ASX) listed shares to 7
October, 2020. The New Shares will rank equally with the Company’s
existing ordinary shares. The placement will be closed in two
tranches as soon as possible after and subject to receipt of all
necessary regulatory approvals including ASX and TSXV
approvals.
Subject to exchange approvals and
acceptance:
- the first tranche of the Placement
securities (being 11,362,629 New Shares and 5,137,371 Options) the
securities will be issued within the Company’s existing ASX Listing
7.1 capacity.
- the second tranche of the Private
Placement (being the balance of 6,225,258 Options) will close on 2
November 2020. Tranche 2 will be subject to receipt of shareholder
approval for the issue of the tranche 2 securities to be sought at
the Company’s upcoming Annual General Meeting on 30 October
2020.
The net proceeds from the Offering will be used
for working capital purposes as the Company continues to make
progress towards completion of its Feasibility Study for the Lake
Giles Iron Project in the Yilgarn region of Western Australia
(“Project”), and as it advances discussions on its main round of
project financing for the Project.
Equity Finance Facility
In addition to the Private Placement , the
Company has executed a Controlled Placement Agreement with L1
Capital Global Opportunities Master Fund (“L1”), which will provide
flexibility to the Company in regard to supplementary access to
additional equity, if required, and at the Company’s election. The
agreement entitles the Company to issue shares to L1 over 36 months
under “Placement Notice(s)” at the Company’s discretion, and to
receive funds for the issue of those shares on the following key
terms:
- Term: 36
months.
- Purchase Price:
Placement Shares are priced at the greater of 90% of: (i) the
average daily VWAP over 30 Trading Days of the Company’s Australian
Securities Exchange (ASX) listed shares following delivery of a
Placement Notice (Pricing Period); and(ii)
the Minimum Acceptable Price nominated by the Company (provided
that the discounted Minimum Acceptable Price cannot be lower than
any minimum price required under the ASX Listing Rules or the TSX
Listing Rules, and in any event not less than AUD 0.20).
- Placement Shares:
The maximum number of Shares that can issued under a Placement
Notice cannot exceed 10 times (or 1000%) of the average daily
number of Shares traded on ASX and TSXV (in aggregate) during the
15 Trading Days prior to and excluding the applicable Placement
Notice Date.
- Completion:
Completion of each Placement will take place after the relevant
Pricing Period, at which time L1 will pay the determined Purchase
Price for the Placement Shares and the Company will issue the
Placement Shares to L1 (or its nominee).
- Share Lending: In
order to give a Placement Notice, the Company must have procured
for a third party to loan the requested number of Placement Shares
to the Investor. These loan shares are to be returned by the
Investor to the lender on the Investor receiving tradeable
Placement Shares. The lender will receive no consideration for
providing the loan shares.
- Fees: Macarthur
will pay L1’s reasonable legal costs up to a maximum of USD 20,000.
If Macarthur terminates the Controlled Placement Agreement early,
then it will pay a USD 100,000 Termination Fee to L1. No other fees
are payable by the Company to L1 under the Controlled Placement
Agreement.
There is no immediate dilutionary impact from
the Equity Finance Facility, which the Company will maintain and
may draw upon as necessary, to support the Company’s pre-delivery
phase for its Lake Giles Iron Project and other value accretive
endeavours for the benefit of the Company and its shareholders.
Any future issues of Shares under the Controlled
Placement Agreement are expected to be issued under the Company’s
ASX Listing Rule 7.1 placement capacity (or other shareholder
approved and available capacity from time to time) if and when the
Company draws down under the Equity Finance Facility.
Advisory Fees
The advisory fees payable for the Private
Placement and the Equity Finance Facility are summarised below.
Fees for Private
Placement
EAS Advisors, LLC, through Odeon Capital Group
LLC ("Odeon") acted as financial
adviser for the Private Placement. Pursuant to a Consulting and
Advisory Agreement between Odeon and the Company dated 9 October
2020, Odeon will receive an Equity Placement Financing Completion
Fee equal to 6% (six percent) of the gross proceeds raised from
investors in the equity capital raising and received by the Company
in cleared funds. The total Equity Placement Financing Completion
Fee payable to EAS for completion of the Offering following close
will be AUD 374,966.76, resulting in the Company receiving net
proceeds from the Offering of AUD 5,574,479.24.
Fees for Equity Finance
Facility
EAS Advisors, LLC, through Odeon Capital Group
LLC ("Odeon") and CST Capital Pty
Ltd (“CST”) acted as joint advisers for arranging
the Controlled Placement Agreement. The advisory and arranger fees
payable to each party for the Equity Finance Facility are
summarised below.
Odeon
Pursuant to the Consulting and Advisory
Agreement between Odeon and the Company dated 9 October 2020,
subject to successful completion of establishment of the Equity
Finance Facility under the Controlled Placement Agreement, Odeon
will receive the following remuneration:
- a cash fee of AUD 200,000 with 50%
to be paid by October 31, 2020 and 50% to be paid by November 30,
2020; and
- ASX listed ordinary shares of the
Company to a value equal to USD 200,000 with 50% of the shares to
be issued by October 31, 2020 and the balance 50% to be issued by
November 30, 2020. The shares will be issued at a price equal to
the thirty (30) day VWAP prior to the date of such issue and will
be subject to a voluntary 4 month hold period from the relevant
dates of issue.
CST Capital Pty Ltd
Pursuant to a Services Agreement between CST and
the Company, dated 12 October 2020, subject to successful
completion of establishment of the Equity Finance Facility and to
receipt of any required exchange and shareholder approvals, CST
will be paid a fee of USD 250,000 (“Fee”).
In addition to the Fee, and subject to the
Company obtaining shareholder approval to issue options to (among
others) third parties for consulting and arranger fees at the
Company’s upcoming Annual General Meeting, CST will also receive
1.5 million unlisted Options for the issue of ordinary shares in
the Company on ASX at an exercise price equal to 150% of the lowest
daily VWAP in the thirty (30) Trading Days preceding the Company’s
Annual General Meeting. The Options will have an expiry date of 24
months from the issue date. If the Company does not obtain
shareholder approval to the issue of the Options, the Company must
instead pay CST A$300,000 in lieu of the issue of the options.
On behalf of the Board of Directors, Mr.
Cameron McCall, Executive Chairman
For more information please contact:
Joe PhillipsCEO & Director+61 7 3221
1796communications@macarthurminerals.com
Investor Relations – Australia |
Investor Relations - Canada |
Advisir |
Investor Cubed |
Sarah Lenard, Partner |
Neil Simon, CEO |
sarah.lenard@advisir.com.au |
+1 647 258 3310 |
|
info@investor3.ca |
About L1 Capital Global Opportunities
Master Fund
L1 Capital Global Opportunities Master
Fund invests in structured investments, such as convertible
bonds, along with primary market transactions to deliver strong
positive returns to investors. The Fund has an absolute return
approach with a strong focus on capital preservation and
multi-layered risk management.
Company profileMacarthur is an
iron ore development, gold and lithium exploration company that is
focused on bringing to production its Western Australia iron ore
projects. The Lake Giles Iron Project mineral resources include the
Ularring hematite resource (approved for development) comprising
Indicated resources of 54.5 million tonnes at 47.2% Fe and Inferred
resources of 26 million tonnes at 45.4% Fe; and the Lake Giles
magnetite resource of 53.9 million tonnes (Measured), 218.7 million
tonnes (Indicated) and 997 million tonnes (Inferred). Macarthur has
prominent (~721 square kilometer tenement area) gold, lithium and
copper exploration interests in Pilbara region of Western
Australia. In addition, Macarthur has lithium brine Claims in the
emerging Railroad Valley region in Nevada, USA.
This news release is not for
distribution to United
States services or for dissemination in
the United States
Caution Regarding Forward Looking
StatementsCertain of the statements made and information
contained in this press release may constitute forward-looking
information and forward-looking statements (collectively,
“forward-looking statements”) within the meaning of applicable
securities laws. All statements herein, other than statements
of historical fact, that address activities, events or developments
that the Company believes, expects or anticipates will or may occur
in the future, including but not limited to statements regarding
expected completion of the Feasibility Study; conversion of Mineral
Resources to Mineral Reserves or the eventual mining of the
Project, are forward-looking statements. The forward-looking
statements in this press release reflect the current expectations,
assumptions or beliefs of the Company based upon information
currently available to the Company. Although the Company believes
the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees
of future performance and no assurance can be given that these
expectations will prove to be correct as actual results or
developments may differ materially from those projected in the
forward-looking statements. Factors that could cause actual
results to differ materially from those in forward-looking
statements include but are not limited to: unforeseen
technology changes that results in a reduction in iron or magnetite
demand or substitution by other metals or materials; the discovery
of new large low cost deposits of iron magnetite; the general level
of global economic activity; failure to complete the FS; inability
to demonstrate economic viability of Mineral Resources; and failure
to obtain mining approvals. Readers are cautioned not to
place undue reliance on forward-looking statements due to the
inherent uncertainty thereof. Such statements relate to future
events and expectations and, as such, involve known and unknown
risks and uncertainties. The forward-looking statements contained
in this press release are made as of the date of this press release
and except as may otherwise be required pursuant to applicable
laws, the Company does not assume any obligation to update or
revise these forward-looking statements, whether as a result of new
information, future events or otherwise.
Macarthur Minerals (TSXV:MMS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Macarthur Minerals (TSXV:MMS)
Historical Stock Chart
From Jul 2023 to Jul 2024