Monday, 9 April 2012

Great Western Minerals closes $90 mln convertible bond financing

Canada-based Great Western Minerals Group (CVE:GWG) closed its previously announced $80 million convertible bond financing as it moves to advance the development of its Steenkampskraal project in South Africa. Co-lead agents GMP Securities, ISM Capital and Byron Capital Markets also opted to exercise an over-allotment option of $10 million, boosting the offering to $90 million.
The bonds are convertible into common shares of Great Western at a conversion rate of 66 cents per share.
The bonds also have a yearly interest of eight percent and mature on April 6, 2017. They are payable semi-annually, Great Western said.
Proceeds from the offering will be used to complete an NI 43-101 technical report on its Steenkampskraal property, and to advance the project's development.
Funds will also be used to build the company’s monazite processing plant and rare earths separation facility, as well as for the expansion of its processing unit Less Common Metals and for general working capital purposes.
Great Western paid a cash commission of $3.6 million to the agents. The bonds issued are subject to a four month hold period, which expires on August 6, 2012.
Last month, the rare earths explorer said its rare earths alloys processing unit, Less Common Metals, signed a contract to buy a second strip cast furnace.
The new strip cast furnace features similar design and output capacity as the first strip furnace unit purchased by the Less Common Metals in 2011, and commissioned in January 2012.
According to the deal, the furnace will be shipped from China prior to the end of November and will be installed at Less Common Metals by a team of engineers, consisting of the company's own technical staff and personnel from the furnace manufacturer.
Great Western is an integrated rare earths processor. Its specialty alloys are used in the battery, magnet and aerospace industries.
As part of the company’s vertical integration strategy, Great Western also holds 100 percent of Rare Earth Extraction Co. Limited, which owns a 74 percent equity stake in the Steenkampskraal Mine in South Africa.
The company also holds interests in four active rare earth exploration and development properties in North America.

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