Great Western Minerals announces min $15 mln private placement financing

Great Western Minerals (TSE:GWG) (OTC:GWMGF) said late Thursday that it plans to launch a brokered private placement financing for a minimum of $15 million in common shares.
The company has hired a syndicate of agents for the offering, co-led by Byron Capital Markets and Cormark Securities.
The pricing of the offered shares will be determined by the company and agents in the context of the market, Great Western said.
Proceeds will be used for the continued development of the company's Steenkampskraal rare earth project in South Africa, as well as for general corporate purposes.
President and CEO, Jim Engdahl, said: "This financing will move GWMG one more important step toward its goal of being a fully integrated rare earth producer. We have carefully considered the various financing options available and feel an equity financing will provide the company with the greatest flexibility in the short term.
"Ensuring we have adequate capital on hand puts our company in a much stronger position as we continue to evaluate non-dilutive financing mechanisms such as joint ventures/off-take agreements and debt instruments."
The company also said it has deferred its planned special meeting of shareholders originally scheduled for November 22. Great Western said it had been contemplating a re-confirmation of shareholder approval for undertaking a share consolidation, initially approved by shareholders in August, but because of the current state of global financial markets, the company has decided that such a plan would not be in the best interests of stakeholders.
Engdahl commented: "Our company evaluated this strategic decision very carefully. A share consolidation can be a catalyst that enables GMWG to fully access a broader capital markets strategy, and on that basis, could be of benefit to shareholders. The current financial market conditions, however, intervened and the company's assessment was that shareholders' interests would not be served by proceeding at this point."
In September, Great Western said an NI 43-101 compliant report from Steenkampskraal is due in the first half of next year, with the facility to begin full operations on both the mining and processing side by the first quarter of 2013. Anticipated total capital costs for the Steenkampskraal facility amount to $60 million.
Demand for rare earths is boooming, as despite being used in relatively small amounts, the metals are necessary to the growing production of energy-efficient green products, mobile electronics and electric vehicles.
Deposits of the metals are not actually rare, but high capital costs, difficult metallurgy, marginal ‘heavy’ rare earths grades, and a lack of people with significant rare earths processing experience are major hurdles to bringing new mines to production, bringing Great Western's advanced Steenkampskraal mine to investors' attenion.