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.
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
"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."
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.
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.