just re-reading the project financing announcement from 24th August, they did say then that full details of a capital raising would be announced in a few weeks
"PROJECT FINANCE AND STRATEGIC INVESTOR SECURED Highlights „h Secures long term financing arrangements for lithium project through binding Agreement with Creat Group „h Creat to invest at least A$26 million through a strategic placement of 19.9% of Galaxy¡¦s expanded capital „h Creat to provide debt finance facility of approximately A$130 million at commercial market rates and terms „h Galaxy to raise further equity to complement the project finance strategy „h Lithium Project to proceed subject to final shareholder approval
Under the terms of the Agreement, Creat will subscribe for 19.9% of Galaxy¡¦s expanded capital, at a 30 day volume weighted average market price (VWAP) on the date of initial non-binding MOU execution (10 August 2009, being A$0.88 per share). This placement will result in a raising of at least A$26 million for the Company. The Placement is conditional on Galaxy shareholder approval. An Extraordinary General Meeting will be held early October 2009. In addition, Creat will provide Galaxy with 100% debt finance of approximately A$130 million for the purpose of developing both the Mt Cattlin Spodumene and Jiangsu Lithium Carbonate Projects. Creat will provide the loan over a period of 7 years at very attractive interest rates for Galaxy. Under the Agreement, Creat has a ¡§standstill¡¨ commitment as well as been granted one Non Executive Board member representation on the Galaxy Board. Galaxy also intends to raise further equity by way of a placement to sophisticated and institutional investors to supplement the project debt finance. Whilst initially the Company has the excellent opportunity to use the Creat full debt facility to finance the project, the extra equity will be used to reduce debt to more conservative levels when the project meets steady state operations. Prior to this, the cash will act as a buffer for debt service, and to meet possible delays and overruns during construction, commissioning and start up of the project. Full details of the capital raising will be announced in the coming weeks.
GXY Price at posting:
$1.75 Sentiment: LT Buy Disclosure: Held
