Perth, Dec 4, 2007 (ABN Newswire) - Golden West Resources Limited (Golden West)(ASX: GWR) is pleased to announce it has successfully raised $26.78 million to further advance its flagship Wiluna West Iron Ore Project following completion of a placement to institutional and sophisticated investors.
To reward the loyalty of its shareholders, Golden West now plans to undertake a rights issue to all shareholders on matching terms to raise a further $10.7million.
These two funding initiatives will provide the necessary funding to undertake an aggressive work program at Wiluna West over the next 12 to 18 months, including extensive drilling to fully define the potential mineral resource, as well as detailed prefeasibility and definitive feasibility studies.
The placement was managed by Capital Investment Partners and represents approximately 19.7% of the Company's existing issued share capital or 16.5% of the issue capital following the placement.
Some 14.477 million new Golden West shares were placed with a number of major institutions, including international investors based in the US, UK and Hong Kong, as well as sophisticated professional investor clients of Capital Investment Partners.
The bookbuild attracted significant institutional demand and was completed within 24 hours.
The placement was priced at $1.85 per share, representing a 12.7% discount to Golden West's closing price of $2.12 on 29 November and a 19.2% discount to the five day volume weighted average price of $2.29.
Shareholders approved the placement and terms at the Company's Annual General Meeting on 29 November 2007.
No individual investor, or group of associated investors, received an allocation of stock equal to or exceeding 5% of the issued capital of GWR and no stock was placed with existing GWR shareholders.
CIP and Azure Capital, Corporate Advisors to Golden West, believe that this distribution of stock will significantly broaden and deepen the market for GWR shares, increase the liquidity of the stock, and expand stock-broking and research support of the stock.
In recognition of the support provided by current shareholders, Golden West will shortly undertake a nonrenounceable rights issue that will entitle existing shareholders to subscribe for shares at the same discounted price of $1.85 per share, on the basis of one new share for every 15 shares already held.
The timetable for the rights issue is currently being finalised which will be announced shortly. As stated above, these two funding initiatives will be used directly to progress the next development development of Wiluna West.
In October, Golden West increased the JORC Inferred Mineral Resource at Wiluna West by 72% to 86.3 Million Tonnes at 60.1% Fe, and anticipates further increases as drilling progresses.
The Company has also appointed experienced iron ore executive Geoff Wedlock as the new Chairman of Golden West, marking a significant milestone for the Company that will undoubtedly assist Golden West with its development ambitions. Mr Wedlock brings more than 35 years experience in minerals exploration and project development, including senior executive roles with BHP Billiton, Portman Mining and Grange Resources.
Golden West is confident that these above achievements clearly demonstrate its ability to advance the Wiluna West Iron Ore Project for the benefit of all Shareholders.
The Company repeats the unanimous recommendation of the Independent Directors to REJECT the all-scrip takeover offer from Fairstar Resources and IGNORE all correspondence from Fairstar Resources.
In the opinion of the Independent Directors, the Fairstar Offer:
- undervalues the Company;
- significantly dilutes shareholders' interests in the Wiluna West Iron Ore Project;
- does not offer access to any other substantial assets or increased capability within the combined entity;
- does not bring any meaningful cost synergies;
- will incur substantial costs that will deplete financial resources that could otherwise be applied to the development of Wiluna West; and
- may result in significant capital gains tax imposts for Golden West Shareholders who accept the Fairstar offer.
Golden West is pleased to advise that the Company's Target's Statement is now available at:
http://www.goldenwestresources.com/takeover.php
