Apex Minerals NL (ASX: AXM)
ASX RELEASE
25
September 2009
To Undertake $109 Million Rights Issue to Eliminate Debt and Fund Growth
Strategy
Highlights
� Renounceable nine-for-two rights issue at 4 cents per
share, fully underwritten by Patersons Securities
� One new quoted, 3 year option for every 10 new
shares subscribed, exercisable at 6 cents
� Raising will leave Apex debt-free with approximately $40m
cash to fund mine development plan and working capital
� New diversified mine plan will see Apex producing
from four independent underground zones by early 2010 rather than having to
rely on just the one
� From August, Apex has been producing from two zones
with a third, independent zone, expected to be in production by the end of 2009
� Production to rise to over 140,000 ounces a year
� Buy back of all Senior Secured Notes at a 12%
discount to face value
Apex Minerals NL (ASX: AXM)
is undertaking a fully underwritten nine-for-two (9:2) renounceable rights
issue to raise $108.6 million at an offer price of 4 cents per share as part of
a transaction which will leave the Company debt-free and on track to become a
substantial mid-tier gold producer with annual production of over 140,000
ounces.
Approximately $53 million of the
proceeds will be used to repay Apex's senior secured notes, which represent all
of the Company's senior secured debt. The repayment terms represent a 12 per
cent discount to their face value.
A further $23 million will be spent
on mine development as part of a revised operating plan that will see Apex
mining at four independent underground zones over the next six months,
providing far greater production diversity than having just one zone in
production as was the case until recently.
Approximately $16 million will be
available for working capital and $10 million to repay a short term facility
(see "Short Term Facility" section below). Apex's Managing Director
Mark Ashley said the rights issue and debt elimination would put Apex in a
robust financial position and enable it to undertake the mine development which
would underpin an increase in production to over 140,000 ounces a year.
"We have recruited some highly
experienced technical personnel and resolved the operational issues which arose
in the middle of the year," Mr Ashley said. "The restructure will
enable us to reap the benefits of this work by growing production and taking
full advantage of the Company's significant gold inventory."
SUMMARY OF THE RIGHTS ISSUE
The renounceable rights issue comprises nine (9) new shares
for every two (2) existing shares held at 4 cents per share. For
every 10 new shares subscribed for, investors will also receive 1 new option.
The options shall have an exercise price of 6 cents per share and an expiry
date of 3 years from their issue date. Apex will apply to list the options on
the ASX. As the rights issue is renounceable, the rights can be transferred or
sold.
The offer price of 4 cents per New
Share represents a 59%
discount to Apex's closing price on 21 September 2009 prior to entering the
trading halt.
The Offer is fully underwritten,
subject to customary terms and conditions, by Patersons Securities Limited,
which is acting as Lead Manager and Underwriter.
Apex is advised by Azure Capital as
Corporate Adviser and Napier Legal as Legal Adviser.
Subsequent to the rights issue Apex
will have approximately 3,318 million ordinary shares on issue (before the
exercise of any options/warrants/partly paid shares).
Further details of the rights issue
and the effects of the restructure on Apex, including key risks of the rights
issue, are contained in an investor presentation posted on the Apex website and
released to the ASX. Outlined
below is a timetable of relevant events and dates relating to the rights issue.
These dates are indicative only.
Event
|
Proposed Date
|
Prospectus and Appendix 3B lodged
with ASX
Notification sent to option
holders
|
Wednesday, 30 September
|
Notice of Rights Issue sent to
security holders
|
Friday, 2 October
|
Existing shares quoted on an 'ex'
basis
Rights start trading
|
Tuesday, 6 October
|
Record date
|
Monday,12 October
|
Despatch of Rights Issue Documents
to Eligible Shareholders
Offer Period Opens
|
Friday, 16 October
|
Rights stop trading
|
Friday, 23 October
|
Offer Period Closes
|
Friday, 30 October
|
Shortfall Notice Deadline Date
(notice of the Shortfall Securities and Certificate)
|
Wednesday, 4 November
|
Notification of
under-subscriptions to ASX (if any)
|
Thursday, 5 November
|
Shortfall settlement date
|
Monday, 9 November
|
Shares issued
Holding statements despatched
Updated Appendix 3B lodged with
ASX
|
Tuesday, 10 November
|
Commencement of trading of New
Shares
|
Wednesday, 11 November
|
Sub-Underwriting Arrangements
The rights issue is fully
underwritten and the underwriter has agreed that the first $50 million of any
shortfall will be allocated to a group of priority sub-underwriters.
Strong support has been shown by key
Apex stakeholders through their participation in sub-underwriting such a large
portion of the rights issue via this priority pool.
The Senior Secured Noteholders have
entered into an agreement to sub-underwrite half ($25 million) of this priority
pool and the balance is being sub-underwritten by other key stakeholders
including Apex's Chairman.
The Senior Secured Noteholders have
also agreed to sub-underwrite a further $5 million of the remaining underwritten amount under the
general sub-underwriting pool.
BUY BACK OF SENIOR SECURED NOTES
Apex shall buy back from the
Noteholders all 121 existing notes at a 12% discount to face value or A$440,000
per Note for a total of A$53.24 million and will issue the Noteholders 45
million Options (with
the same terms as the options issued under the Rights Issue).
The warrants and gold upside
participation notes that were issued with the notes will not be bought back.
SHORT TERM FINANCING
Apex will, subject to the
satisfaction of certain conditions, issue $10 million of new Senior Secured
Notes on a short term basis to fund working capital throughout the Rights Issue
period. These notes will be bought back by Apex at their face value when the
rights issue is completed.
Mark Ashley
Managing Director
For further information:
Mark Ashley, Managing Director, Apex
Minerals NL
Contacts:
Office: +61 (08) 6311
5555 Mobile:
+61 (0)411 470 104
Paul Armstrong, Read Corporate
Public Relations
Contacts:
Office: +61 (08) 9388
1474 Mobile:
+61 (0)421 619 084
READ CORPORATE
Public Relations Corporate
Communications
T: (+61-8) 9388-1474 | F: (+61-8)
9388-1472 | E: info@readcorporate.com.au | Web: www.readcorporate.com.au