White Rock Minerals Ltd (ASX:WRM, OTCQX:WRMCF) has launched a $4.75 million equity-raising program with the primary aim of continuing the ramp-up of gold production at the Woods Point Gold Mine and gold processing facility in Victoria to full capacity.
Some funds will also be allocated to assess and prioritise the next exploration steps at the Red Mountain Project in Alaska.
One component of the equity raising is a placement of fully paid ordinary shares to institutional and sophisticated investors to raise about $1.3 million.
The other component is a pro-rata non-renounceable 1-for-5 entitlement offer of fully paid ordinary shares to raise around $3.45 million.
The placement
White Rock has received firm commitments for a placement of new shares to certain institutional and sophisticated investors at the issue price of A$0.07 per share.
It is expected that approximately 18,571,429 new shares will be issued as part of the placement on or about December 14, 2022.
The board will seek shareholder approval at a General Meeting of the company, planned to be held on January 31, 2023, to take up to $200,000 on the same terms as the placement.
The entitlement offer
Under the entitlement offer, eligible shareholders will be able to subscribe for 1 new share for every five existing fully paid ordinary shares held at 7.00 pm (AEDST) on December 15, 2022, at the offer price of $0.07 per share.
If fully subscribed, this offer will raise up to $3.45 million before costs.
Entitlements are non-renounceable and will not be tradeable on ASX or otherwise transferable.
“Pleasing to see support”
White Rock executive director Simon Finnis said:- “It is pleasing to see the support we received for the placement and we are hopeful and optimistic that our shareholders will follow suit.
"The team at Woods Point have done a terrific job to get where we’ve got to so far, on what can only be described as a shoestring budget.
"However, to ensure we meet our targets we need to keep funding the ramp up, and we have put in place a realistic and sensible plan to do that, aiming to be at steady state production by mid-2023.
Top-up facility
In addition to being able to apply for new shares under the entitlement offer, eligible shareholders will also have the ability to apply for additional new shares in excess of their entitlement.
This top-up facility will only be available over those shares that are not subscribed for by other eligible shareholders under the offer.
If applications received for shares under the entitlement offer, including the top-up facility are less than the number of shares available under the offer, the directors reserve the right to place the shortfall at their discretion within three months of close of the offer.
Viriathus Capital Pty Ltd is acting as lead manager to the equity raising, which is not underwritten.
Use of funds
Funds from the equity raising, after costs, will be used for:
- Continuing the ramp-up of the Woods Point Gold Mine and gold processing facility to full production;
- In-mine and regional exploration at Woods Point;
- A review of all geological data at Red Mountain;
- Care and maintenance at the Red Mountain Project; and
- Working capital and costs of the capital raise.
"Lastly, we’ll do some work on the Red Mountain project to assess and prioritise the next exploration steps in that very exciting field.”
Early redemption of notes
Meantime, the WRM board has agreed terms with Obsidian Global GP, LLC for early redemption of the Convertible Notes and termination of the Convertible Note agreement, which were agreed between the parties on September 7, 2022.
There are 1,695,250 notes on issue, which were issued on September 9, 2022. These Notes have a face value of US$1.15 per note for a total value of US$1,949,538.
Obsidian has requested, and White Rock had agreed, that prior to the redemption Obsidian convert shares to the value of US$300,000 and remain investors in White Rock.
In a statement, WRM said: "White Rock would like to take this opportunity to thank Obsidian for their support. They provided essential funding during a difficult time for White Rock, were very helpful getting White Rock to this position, and for that White Rock is grateful."