Hillgrove raises $10 million
Kanmantoo-based copper miner Hillgrove Resources has completed a capital raising and resumed trading on the stock exchange.
The money raised will be used to pay some old bills and give the company a capital buffer.
Hillgrove parted ways with its Kanmantoo copper mine operator Exact Mining Services last July and had been finalising a settlement agreement to allow a mutual termination of the contract.
At the time the company was confident it could manage the transition.
“Through this changeover process the Kanmantoo Copper Mine is forecast to remain cash flow positive,” it said.
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Hillgrove revealed today it had raised $10.8 million through the issue of more than 153 million shares to institutional and sophisticated investors at an issue price of seven cents per share.
Hillgrove was trading at eight cents when it went into a trading halt last Wednesday.
“The placement was well oversubscribed, with over 70 per cent subscribed for by current Hillgrove shareholders, and strong support from new shareholders,” the company said in a statement today.
“The placement price of seven cents per share represents a discount of 12.5 per cent to the closing price on 18 September 2013 and 12.0 per cent to the volume weighted average price of Hillgrove during the five trading days up to and including 18 September 2013.”
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The new shares will rank equally with existing fully paid Hillgrove shares.
“The funds from this equity raising will be used to finalise the settlement with the previous mining contractor, in addition to providing an appropriate level of working capital buffer.
“Providing this solid capital platform for the Company is prudent at this important time when the new mining operations have successfully transitioned to Hillgrove’s management and operators, and new long term contracts for equipment supply and maintenance and blasthole drilling services have been entered into.”
Long term contracts have been signed with Andy’s Earthmovers (Asia Pacific) Pty Ltd for the supply of fully maintained mining equipment, and with Roc-Drill Pty Ltd for blasthole drilling.
It’s been a wild ride in recent times for shareholders in Hillgrove.
They traded at 8 cents before the trading halt, down from 12 cents six months ago, 25 cents in early 2012 and as high as 40 cents four years ago.
Hillgrove’s managing director Greg Hall had a positive view of the mine’s outlook.
“With the successful transition at Kanmantoo to the new mining services, and the process plant and new crusher continuing to perform in a reliable manner, this successful equity raising will allow us to support our improving cashflow and profit from the Kanmantoo Copper Mine,” he said.
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