This announcement just out...the money is in the bank.
GINDALBIE COMPLETES $162M SHARE PLACEMENT TO ANSTEEL KARARA EQUITY CONTRIBUTIONS TOTALLING $287.4M MADE
Further to its announcement of 23 June regarding Chinese Government approvals, Gindalbie Metals Limited (ASX: GBG – “Gindalbie”) is pleased to advise that the $162.06 million share placement to Ansteel has now been completed.
Gindalbie has allotted 190,658,824 shares at a price of $0.85 per share to Angang Group Hong Kong (Holdings) Limited and the placement funds have been received. The cash injection has allowed Gindalbie to make a $143.68 million equity contribution toward the development of the Karara Iron Ore Project. The remaining $18.38 million from the placement will be retained by Gindalbie and takes its uncommitted cash reserves to approximately $43 million.
Ansteel has also made an equal equity contribution of $143.68 million into the bank account of Karara Mining Limited (KML), the Joint Venture Company which is developing the Karara Iron Ore Project in Western Australia. Gindalbie and Ansteel are equal 50% shareholders in KML.
With these payments, KML holds cash reserves of approximately $350 million to underpin the development of Karara. KML has already spent approximately $200 million on long-lead items, pre-development activities and other items required for project development.
As reported previously, the balance of the capital required for the Karara Project will be provided through a Project Loan Facility of up to US$1.2 billion to be provided by the China Development Bank (CDB). Conditional approval was received for this Project Loan in January this year following a review by their Credit Committee.
“This marks the final step in this important transaction with Ansteel, which has enabled us to secure equity funding for the Karara Project during one of the most difficult market environments seen in recent times,” said Gindalbie’s Managing Director, Mr Garret Dixon.
“On behalf of the Gindalbie Board, I welcome Ansteel’s investment in Gindalbie which sees them increase their shareholding to 36% effective from today,” he added.
“These transactions form a key part of the financing for the Karara Project and leave Gindalbie in a very strong position, with $43 million in cash, no debt and minimal cash burn given that all project development expenditure and activity is being conducted through KML.”
GBG Price at posting:
78.5¢ Sentiment: LT Buy Disclosure: Held