Mundo
Minerals Limited (ASX: MUN)
ASX
RELEASE
18 JULY 2007
$18M
Capital Raising to Secure Development of South
American
Gold Assets
Highlights
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Placement of
36,000,000 shares at 50 cents per share in two tranches to raise a total of
A$18 million.
�
Directors announce
a Share Purchase Plan to enable existing shareholders to increase their
holdings at the same price as the share placement.
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Development of
100%-owned Engenho Gold Project in Brazil fully funded from this
equity raising.
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Proceeds will also
underpin initial development work at Torrecillas (Peru)
and diamond drilling at Tocantins (Brazil), to be advanced in the
immediate future.
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Mundo balance sheet
to remain debt free and totally unhedged, maintaining full participation in any
increase in the gold price.
�
Mundo will also
retain full cash flow from the Engenho Project which is available to further
develop the Company’s other emerging assets in Latin
America.
Mundo Minerals Limited (ASX: MUN) is pleased to advise that it has
completed a placement of 14.4 million shares
at 50 cents per share to
sophisticated and professional investors, raising A$7.2 million. In addition, the Company intends to seek
shareholder approval to raise a further A$10.8
million through the placement of a second tranche of shares at the
same price, amounting to a total capital raising of A$18 million.
Both tranches of the placement have
been fully committed primarily by institutional investors. Significant support
was received from Lodge Partners and Tolhurst Noall in completing this
placement.
The landmark capital raising,
together with existing cash reserves, will secure all required funding for the
100%-owned Engenho Gold Project in
Brazil,
while at the same time enabling Mundo to accelerate exploration and evaluation
activities at its other two South American gold projects. This effectively
underpins the Company’s future development.
The first tranche of the share
placement is within the limits set out in the ASX Listing Rules, which allows a
company to place up to 15% of its issued capital without shareholder approval.
Mundo’s Board intends to seek shareholder approval to place the second
tranche, comprising 21.6 million shares
at 50 cents each to raise a
further A$10.8 million. A
shareholder meeting will be convened and expected to be held on 24 August 2007
to seek this approval.
In conjunction with the share
placement, Mundo also today announced its intention to implement a Share
Purchase Plan (“SPP”). Under the SPP, all Mundo shareholders with
registered addresses in Australia
and New Zealand
as at 18 July 2007 will be able acquire up to $5,000
worth of shares at 50 cents per share,
providing them with the opportunity to increase their shareholdings on the same
basis as sophisticated and professional investors participating in the
placement
The indicative timetable associated
with the share placement and SPP is as follows:.
Event
|
Date
|
Announcement of trading
halt
|
Monday 16 July 2007
|
Undertake Share
Placement to investors (Tranche 1)
|
Tuesday 17 July 2007
|
Announcement of Share
Placements and SPP and resumption of trading
|
Wednesday 18 July 2007
|
SPP Record date
|
Wednesday 18 July 2007
|
Despatch of EGM notice
to approve Tranche 2 of Placement, along with SPP offer documents
|
Monday 23 July 2007
|
DvP Settlement of
Placement (Tranche 1)
|
Tuesday 24 July 2007
|
Allotment of Placement
shares (Tranche 1)
|
Wednesday 25 July 2007
|
Tranche 1 shares
expected to commence trading on ASX
|
Friday 27 July 2007
|
SPP closing date
|
Wednesday 22 August 2007
|
EGM to approve Placement
(Tranche 2) and refresh Placement capacity
|
Friday 24 August 2007
|
DvP Settlement of
Placement (Tranche 2)
|
Wednesday 29 August 2007
|
Allotment of Placement
shares (Tranche 2) and SPP shares
|
Thursday 30 August 2007
|
Tranche 2 shares and SPP
shares expected to commence trading on ASX
|
Friday 31 August 2007
|
USE OF FUNDS
The proceeds of the share placement
(assuming shareholders approve the second tranche) and SPP (assuming fully
subscribed) will increase Mundo’s available cash reserves to in excess of
$31 million, providing a strong foundation for the Company to achieve its core
growth objectives as an emerging mid-tier gold company. Specifically, the funds
raised, together with existing cash, will:
- provide
all the required capital to complete development of the Engenho Gold Project in Brazil,
which is on schedule to commence production in the first quarter of 2008
at an initial rate of approximately 30,000oz per annum;
- underpin
the immediate commencement of the next phase of assessment of the Torrecillas Gold Project in Peru, which will take 18-24
months;
- provide
funding to undertake a major diamond drilling program targeting the
recently identified extensive gold anomaly at the Concei��o East prospect, part of
Mundo’s Tocantins Gold Project
in Brazil. Drilling is targeted to commence during the third Quarter of
2008.
Development activities at Engenho,
Mundo’s first gold production asset in South America,
are well advanced with installation of the crusher now underway on site.
Dewatering of the open pit has commenced in anticipation of mine development
commencing in October 2007, and regulatory approval was recently received for
construction of the tailings dam. This critical event will enable construction
to be completed before the onset of heavy rainfall, which normally occurs
between November and February.
The next phase of project assessment
has already commenced at the Tocantins Project in Peru, with tenders received for
development of an exploration decline. This will facilitate access a number of
the high-grade veins in order to establish an initial resource and enable a
decision to commence production to be made within 18 months to 2 years. Tocantins is expected to emerge as the Company’s
second production asset.
Recently announced initial results
from an ongoing RAB drilling program at the Concei��o
Prospect at the Tocantins Gold
Project in Brazil
have upgraded the potential for a significant new gold discovery on these
tenements. Tocantins is a large greenfields gold exploration project located in
Central Brazil.
Commenting on the announcement,
Mundo’s Chief Executive Officer, Mr John Langford, said this next phase
of project development and assessment was expected to significantly consolidate
Mundo Minerals as an emerging mid-tier production house with a sustainable
production assets and a growing resource base.
“The Board assessed a number
of alternative funding propositions including the implementation of some
hedging,” Mr Langford said. “Some of these options required equity
to be offered with the funding and all had commercial returns to be provided to
the financier, including ongoing fee structures. In addition, cash flow from
Engenho would be required to be directed or set aside for repayment of the finance.”
“In light of the significant
progress achieved in the past six months in unlocking the potential of all our
core assets, the Board has concluded that shareholders will benefit most from
retaining 100% of the available cash flow from Engenho, remaining fully exposed
to potential increases in the gold price, and being able to immediately
implement development strategies at Torrecillas and Tocantins rather then being
restricted until free cash flow is available from Engenho.”
A notice of shareholders meeting and
details of the Share Purchase Plan will be issued as soon as the documentation
is completed.
John Langford
Chief Executive
Officer
Background
Information
Mundo Minerals Limited is an Australian
gold company focused on the exploration and development of a portfolio of
advanced, high-quality gold assets in South America
with the potential to position the Company as a substantial mid-tier
Australian-domiciled gold production house.
Mundo is aiming to commence initial
production at its flagship asset, the Engenho
Gold Project in Brazil,
by March 2008, laying the foundations for its growth strategy as a mid-tier
Australian-domiciled producer focused on small-to-medium sized high-grade ore bodies
in South America.
The Engenho Project, which is
located in the State of Minas Gerais in Brazil,
was previously operated by AngloGold Ashanti Limited which closed it in 2004
after treating some 171,257 tonnes of ore from an open pit through a conventional
Carbon-in-Pulp (CIP) treatment facility.
Mundo’s other two exploration
assets in South America are the 100%-owned Torrecillas
Gold Project in Peru
and the Tocantins Gold Project in Brazil.
These projects have the potential to yield multiple resources to underpin the
Company’s long-term growth.
The Torrecillas Project comprises
some 9,000ha of tenements with a history of high-grade gold production in
south-eastern Peru, a region which hosts a number of small-to-medium sized gold
mines, including the Area, Capitana, Arirahua, Alcapay and Laytaruma operations
– each of which have a production range of 25,000 – 80,000oz per
annum.
The Tocantins Project is a joint
venture where the Company has agreed to spend US$1.3M to earn a 51% interest in
tenements controlled by Gamaleira Prospeccao E Geologia Ltda (a Brazilian joint
venture between AngloGold Ashanti
and IAMGOLD Corporation). Mundo can increase this equity to 80% by taking any
gold resource to a bankable feasibility study. The Tocantins
tenements are located in a highly prospective region which includes three
greenstone belts with the potential to contain multiple mid-size gold deposits.