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.
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
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
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.