Great Western Minerals prices convertible bond financing, begins search for new CEO

Great Western Minerals (GWMG)(CVE:GWG) Friday priced a convertible bond offering as it also began the process of looking for a new chief executive officer.

The offering of secured convertible bonds was priced at $80 million by GMP Securities, ISM Capital along with Byron Capital Markets. In addition, the firms have been granted an option to increase the size of the offering by up to an additional $10 million at any time at least two days prior to closing and settlement.

The new funds from the offering will be used by the company to complete an NI 43-101 compliant technical report on the company's Steenkampskraal mine in South Africa, and to advance the development of the operation.

The funds will also be used to construct the company's monazite processing facility and rare earths separation facility as well as for the expansion of its processing subsidiary Less Common Metals and for general working capital purposes.

"The successful pricing of this financing is an important achievement. It is particularly gratifying that the offering has been so well received, conveying a high degree of confidence in the future of our company," Great Western Minerals' president and chief executive officer Jim Engdahl said.

"According to our company’s most recent estimates and in the opinion of management, this financing enables GWMG to construct the mixed rare earth chloride and separation plants for Steenkampskraal and provide the National Instrument 43-101 technical report. This is a pivotal moment for GWMG."

The bonds will bear interest at the rate of 8 percent, will become due five years from the date of issuance and will be convertible into common shares of Great Western at a conversion rate of $0.66 per share, representing a premium of 20 percent relative to the closing share price of $0.55 per share on the TSX Venture Exchange on March 14.

Closing and settlement of the offering is anticipated to take place on or about April 5, 2012.

Additionally, the company also announced that Engdahl has recommended that a transition process be put in place to recruit and select a new chief executive officer for the company.

The company's board has accepted that recommendation and has authorized Engdahl to begin the recruitment and selection process.
"GWMG is about to make the considerable leap to being what I believe will be one of the most fully integrated rare earth producers in the world. My stated objective was to position the Company for rapid growth with an integrated model and on a fully funded basis. This has now been achieved," Engdahl said.

Great Western Minerals' executive chairman Gary Billingsley said: "Jim has guided GWMG from being a junior rare earth exploration company, to its current status where it is poised to become one of the few integrated rare earth producers in the world. We have reluctantly accepted Jim's proposed transition."

Great Western Minerals Group is an integrated rare earths processor. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the company’s wholly owned subsidiaries Less Common Metals in Birkenhead and Great Western Technologies Inc. in Troy, Michigan, these alloys contain aluminum, nickel, cobalt and rare earth elements.

As part of the company’s vertical integration strategy, GWMG also holds 100 percent of Rare Earth Extraction Co. Limited, which owns a 74 percent equity interest in the Steenkampskraal Mine in South Africa.

The company also holds interests in four active rare earth exploration and development properties in North America.