AI assistant
Resolute Mining Limited — Capital/Financing Update 2008
Nov 27, 2008
10548_rns_2008-11-27_54146a5e-8eb1-42f8-8dbd-3d19144af2d7.pdf
Capital/Financing Update
Open in viewerOpens in your device viewer
==> picture [80 x 102] intentionally omitted <==
28 November 2008
Dear Shareholder,
In light of the dramatic events of recent weeks, we would like to provide you with a brief update on the Company’s activities and plans for the months ahead.
Without doubt, the rapid decline in world financial markets has been a great shock to investors everywhere. In particular, it has had a serious effect on the ability of companies to raise capital needed to continue developing their businesses.
Resolute has not been immune to such pressures, but it is a matter of great satisfaction that we have been able to arrange a major capital raising that will provide us with sufficient funds to complete the development of our flagship Syama gold project in Mali and maintain our other activities.
This initiative seeks to raise approximately $72.5 million, and we have already received commitments to subscribe for approximately $50 million from major shareholders and sophisticated investor clients of Patersons Securities.
In the current market conditions, this is an outstanding achievement and represents a major vote of confidence in both the Company and the Syama project.
Furthermore, we have ensured that all shareholders have the opportunity to take advantage of the terms of this capital raising.
The capital raising comprises an issue of listed convertible notes to raise $60 million and a coincident pro-rata non-renounceable rights issue to shareholders to raise a further $12.5 million.
The convertible notes will have a face value of 50c and pay an annual interest rate of 12% per annum over their four year term. Existing Resolute shareholders will have a priority entitlement to subscribe for $10 million of these convertible notes. Subscribers will also receive one free option for every 3 convertible notes taken up under this offer.
Under the non-renounceable rights issue, shareholders will also be offered one new ordinary share at an issue price of 40c for every 9 Resolute shares they hold as of the
RESOLUTE MINING LIMITED A.C.N. 097 088 689 A.B.N. 39 097 088 689 4[th] Floor, The BGC Centre, 28 The Esplanade, Perth, Western Australia 6000. PO Box 7232 Cloisters Square, Perth, Western Australia 6850. Telephone +61 8 9261 6100 Facsimile +61 8 9322 7541 Email : [email protected]
record date. They will also receive one free option for every 3 shares taken up under this offer.
All options issued according to these offers have an exercise price of 60c and a three year term.
Full details of the raising are set out in the attached Appendix.
We will be offering the securities via two separate prospectuses, one for the convertible note issue and one for the pro rata offer. These documents, which contain all the information required to participate in this investment opportunity, will be sent to shareholders in early December.
A shareholder meeting to approve the capital raising will be held on December 22 and it is anticipated that both offers will be closed by Christmas. Trading in Resolute shares is expected to resume shortly thereafter.
Despite the difficult conditions, Resolute heads into the coming year with great confidence.
As you may be aware, Syama produced its first gold from the oxide circuit earlier this week, and will continue to ramp up production as we commission the sulphide circuit during the March 2009 quarter.
Syama is a major project that will underpin Resolute for many years to come. The project has a large reserve and resource base, and is expected to produce more than 250,000 ounces per annum at full capacity.
It also has significant scope for further expansion and optimisation that will further improve returns for Resolute shareholders.
Together with production from our existing operations at Golden Pride in Tanzania and Ravenswood in Queensland, Resolute expects to produce some 350,000 oz in 2009, rising to over 400,000 oz in 2011.
We also look forward to continuing success from our extensive exploration programs in Africa and Australia, for which we have budgeted some $10 million in the 2009 financial year.
We are confident that Resolute will consolidate its position into one of Australia’s leading gold miners over the coming years, and encourage you to share in this opportunity by supporting these important funding initiatives.
Yours sincerely,
==> picture [111 x 40] intentionally omitted <==
Peter Huston Chairman
==> picture [77 x 41] intentionally omitted <==
Peter Sullivan Chief Executive Officer
RESOLUTE MINING LIMITED
A.C.N. 097 088 689 A.B.N. 39 097 088 689 4[th] Floor, The BGC Centre, 28 The Esplanade, Perth, Western Australia 6000. PO Box 7232 Cloisters Square, Perth, Western Australia 6850. Telephone +61 8 9261 6100 Facsimile +61 8 9322 7541 Email : [email protected]
APPENDIX
NON-RENOUNCEABLE PRO RATA OFFER
On 18 November 2008 the Company announced the Capital Raising consisting of the following:
-
(a) A non-renounceable pro rata offer to Eligible Shareholders of 1 Share for every 9 Shares held at the Record Date where each Share is offered at an issue price of $0.40 (Pro rata Offer) to raise up to $12.5 million. The Company will also issue 1 free attaching Option for every 3 Shares subscribed for under the Pro rata Offer.
-
(b) An offer by way of a placement of Convertible Notes to Shareholders, clients of Patersons and the general public to raise up to $60 million where each Convertible Note will be unsecured, listed, have a face value of $0.50 (a total of 120,000,000 Convertible Notes), an interest rate of 12% per annum and a four year term ( Convertible Note Offer ). The Company will issue 1 free attaching Option for every 3 Convertible Notes subscribed for under the Convertible Note Offer.
The Company has set aside and will ensure that Eligible Shareholders have the right to subscribe for a minimum of up to 20,000,000 Convertible Notes on a priority basis under Convertible Note Offer ( Priority Offer ) to raise up to $10,000,000.
The balance of the Convertible Note Offer (up to $50 Million) will be offered to major Shareholders, clients of Patersons and the general public.
The Prospectus relating to Pro Rata Offer has been lodged with the Australian Securities and Investments Commission and ASX and is available on the company's website, www.rml.com.au for inspection. The timetable and important dates of the issue are set out below:
| Pro rata Offer prospectus lodged | 26 November 2008 |
|---|---|
| Despatch letter to Shareholders | 28 November 2008 |
| Existing Shares quoted on an ex basis | 1 December 2008 |
| Record Date for determining entitlements | 5 December 2008 |
| Despatch Prospectus to Eligible Shareholders | 10 December 2008 |
| Closing Date | 24 December 2008 |
| Last date for the issue of the Shares andOptions and despatch of holding statements. | 6 January 2009 |
A Prospectus in relation to the Convertible Note Offer will be forwarded to you shortly.
RESOLUTE MINING LIMITED A.C.N. 097 088 689 A.B.N. 39 097 088 689 4[th] Floor, The BGC Centre, 28 The Esplanade, Perth, Western Australia 6000. PO Box 7232 Cloisters Square, Perth, Western Australia 6850. Telephone +61 8 9261 6100 Facsimile +61 8 9322 7541 Email : [email protected]
Funds raised from the Capital Raising will be utilised primarily as set out below:
| Projected use of funds raised | Firm Commitments$50 million1 | Maximum FundsRaised $72 million |
|---|---|---|
| Completion of the Syama mine | 30.0 | 30.0 |
| Ramp up of Syama operation | 17.3 | 22.0 |
| Development at Mt Wright | - | 5.0 |
| Completion of Syama Free Millingand Finkolo FeasibilityStudies | - | 3.0 |
| Working Capital and funds to paydown debt | - | 8.6 |
| Expenses of Offers | 2.7 | 3.9 |
| Total | 50.0 | 72.5 |
- This column shows how the funds raised will be spent if the only funds raised by the Capital Raising are those for which firm commitments have been received.
The capital structure of the Company on completion of the Capital Raising will be as follows:
| Shares | ConvertibleNotes | Options | UnlistedOptions | |
|---|---|---|---|---|
| Existing | 281,034,725 | 2,297,000 | ||
| Convertible Note Offer | 120,000,000 | 40,000,000 | ||
| Pro rata Offer 1:9 | 31,226,081 | 10,408,694 | ||
| Options for making a firmcommitment to the CapitalRaising | 33,710,493 | |||
| Options to be issued tostandbyfacility provider | 1,250,000 | |||
| Total | 312,260,806 | 120,000,000 | 85,369,187 | 2,297,0002 |
In calculating entitlements under the Offer fractions will be rounded down to the nearest whole number.
The Offer under the Prospectus is made to Shareholders with registered addresses in Australia and New Zealand only.
Full detail of the issue will be contained in the Prospectus that will be mailed to all shareholders who are registered on the record date. Shareholders eligible to participate should read the Prospectus carefully.
RESOLUTE MINING LIMITED A.C.N. 097 088 689 A.B.N. 39 097 088 689 4[th] Floor, The BGC Centre, 28 The Esplanade, Perth, Western Australia 6000. PO Box 7232 Cloisters Square, Perth, Western Australia 6850. Telephone +61 8 9261 6100 Facsimile +61 8 9322 7541 Email : [email protected]