Apex Minerals NL

Published : September 25th, 2009

To Undertake $109 Million Rights Issue to Eliminate Debt and Fund Growth Strategy

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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

 

Apex Minerals NL

PRODUCER
CODE : AXM.AX
ISIN : AU000000AXM0
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Apex Min. is a gold producing company based in .

Apex Min. develops gold and copper in Australia.

Its main asset in production is WILUNA GOLD MINE in Australia, its main asset in development is YOUANMI in Australia and its main exploration properties are METEHUAPIL in Mexico and JILLAWARRA, APOLLO HILL and APHRODITE GOLD PROJECT in Australia.

Apex Min. is listed in Australia and in Germany. Its market capitalisation is AU$ 3.5 millions as of today (US$ 3.3 millions, € 2.5 millions).

Its stock quote reached its highest recent level on August 21, 2009 at AU$ 921.69, and its lowest recent point on August 08, 2014 at AU$ 0.01.

Apex Min. has 318 390 016 shares outstanding.

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Annual reports of Apex Minerals NL
2008 Annual report
Project news of Apex Minerals NL
2/25/2011(Wiluna Gold Mine)Disruption of gas supply
1/31/2011(Gidgee)Sells Gidgee exploration project for $15.5M
1/21/2011(Wiluna Gold Mine)December 2010 Quarterly Report
3/17/2010to start mining at Golden Age after more high-grade results
10/8/2009(Wiluna Gold Mine) Increases Gold Resources at Wiluna
8/18/2008(Wiluna Gold Mine)Spectacular drilling results expand and upgrade mineralisati...
Corporate news of Apex Minerals NL
5/17/2013Wiluna Gold Operations Update
5/17/2013(Youanmi)Apex signs final Sale Agreement for Youanmi
4/24/2013March 2013 Quarterly Report
2/2/2011Set for further growth after eliminating GUP liability
6/18/2010Recruits Leading Industry Executive
3/17/2010Revised Appendix To ASX Announcement
3/11/2010Announces New Company Secretary
12/22/2009Wiluna Update
11/17/2009Completion Of Sale Of Aphrodite
11/5/2009Rights issue
9/25/2009To Undertake $109 Million Rights Issue to Eliminate Debt and...
6/23/2009$14million Non-Renounceable Rights Issue
6/9/2009 achieves production target - again
6/9/2009 to spin off nickel assets in deal with Mark Creasy
3/24/2006(Aphrodite Gold Project)China and western Australia drilling programmes
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