Global Iron raises A$230m to explore for oil and gas.
By: Esmarie Swanepoel 28th May 2010
PERTH (miningweekly.com) Iron-ore explorer Global Iron has taken a further step to changing its company focus by raising up to A$230-million through a share placement, to explore two prospective oil and gas exploration blocks.
The company reported on Friday that it would issue up to 418-million shares, at A$0.55 a share to raise the funds.
The prospectus, which was lodged with the Australian Securities and Investment Commission, would also assist Global Iron to meet its listing requirements for the National Stock Exchange (NSX).
In February, Global Iron announced its decision to shift the company's focus, when it reached an agreement to acquire private company African Petroleum for A$500-million.
African Petroleum owns the rights to two highly prospective oil and gas exploration blocks, located offshore Liberia.
Global Iron chairperson Tony Sage on Friday reported that the funds would be applied towards satisfying the minimum work programme to be undertaken at the Liberian project, including the interpretation of 3D seismic data, to enable drill targeting, the drilling of one to three exploration wells, and to provide capital to secure additional blocks within the Sierra Leone-Liberia basin.
Sage added that upon the acquisition announcement, Global Iron was informed by the ASX that it would not be reinstated for quotation on the ASX. Although the company appealed the decision, the ASX Tribunal upheld it.
The company was now further appealing the decision.
Global Iron shareholders would be meeting next month to vote on the acquisition, the placement as well as the listing of Global Iron on the NSX, as well as the possible delisting from the ASX.
If the company was not successful in its appeal, and shareholders passed the resolution, and the NSX conditionally approved the company for admission, the board of Global Iron would seek to delist the company from the ASX.
The company added that shares offered in the share placement, and shares issued around the share sale agreement with African Petroleum, would not be quoted on the ASX.
Global Iron warned that there was also a risk that the ASX appeal would be unsuccessful, and that the company would not be able to meet the requirements for the NSX quotation. Should this occur, Global Iron shares would not be tradable on the NSX until such time as those requirements could be met, if at all.
If the NSX did not grant conditional approval, no shares would be issued for the fund raising.
