Wolf dives on $183m raising
Wolf Minerals shares dipped sharply yesterday as the com- pany announced a discounted $183 million capital raising to fund construction of its Hemerdon tungsten project in the south of England.
Wolf shares closed down 10.5�, or 23.3 per cent, on thin volumes, ending the day at 34.5� after the company said it had secured the final part of Hemerdon's funding package via a 30� placement to institutional investors.
Ahead of the announcement, Wolf was capitalised at only $90 million, making the raising one of the biggest closed by a small Australian resources company in recent memory.
Despite the dip, Wolf managing director Russel Clark said he was pleased the company's share price had remained above the 30� issue price.
The participation of Wolf's two major shareholders, Resource Capital Funds and New Zealand's Todd Corporation, will take their collective holding in Wolf to almost 75 per cent.
But Mr Clark said the issue of more than 120 million new shares to other institutional holders should improve its market liquidity, particularly in Britain, where it is listed on London's Alternative Investment Market.
The funds will be used to repay a $US75 million bridging loan from RCF and, together with the draw down of $138 million in senior debt facilities now available, would cover the $170 million in remaining capital costs at the project.
Mr Clark said Wolf expected Hemerdon would produce its first tungsten and tin concentrate in late 2015, with the project expected to be cash-flow positive in 2016.
