rio continue to invest in era

I see this morning that ERA have announced a CR for $500M, with RIO fully supportive to provide their portion being $342M (68.4%)

Clearly RIO are in uranium for the long haul, I just wonder how much cash they have set aside for Husab?

Copy of the ANN from Etrade below (not yet on the ERA website for some reason). There is also a 52 page presentation on the CR on the Etrade site, presume these are also available on ASX and shortly on the ERA website.

NB Mods - not cross promoting - this goes to the Husab picture.

Wednesday, 12 October 2011
ERA TO RAISE $500 MILLION IN EQUITY VIA AN ACCELERATED
RENOUNCEABLE ENTITLEMENT OFFER

• 12 for 7 underwritten accelerated renounceable entitlement offer to raise $500
million
• Offer Price of $1.53 per share, a 29.8% discount to the Theoretical Ex-Rights
Price
• Proceeds to be used to fund construction of Ranger 3 Deeps exploration
decline, further studies into development of Ranger 3 Deeps mine, expanded
exploration of the Ranger Project Area and construction of the Brine
Concentrator and other water management initiatives
• Major shareholder Rio Tinto is fully supportive of the capital raising
Following the announcement in August 2011 that Energy Resources of Australia Ltd
(‘ERA’) was well advanced in developing a long term funding plan, ERA today
announced a 12 for 7 accelerated renounceable entitlement offer of new ERA ordinary
shares (‘New Shares’) to all eligible shareholders at an offer price of $1.53 per New
Share (‘Offer Price’) to raise approximately $500 million (‘Entitlement Offer’). The
Entitlement Offer comprises an institutional component (‘Institutional Entitlement
Offer’) and a retail component (‘Retail Entitlement Offer’).
Rio Tinto, ERA’s largest shareholder, is fully supportive of the Entitlement Offer. It
has committed to subscribe for its 68.4% entitlement in full, and the remainder of the
Entitlement Offer is fully underwritten. In addition, Rio Tinto has indicated that it
intends to participate in sub-underwriting of any shortfall in the Retail Entitlement
Offer.
The proceeds of the Entitlement Offer will be used to fund:
(a) the construction of a Brine Concentrator for an estimated cost of $220 million
and other water management initiatives for an estimated cost of $52 million;
(b) the construction of the Ranger 3 Deeps exploration decline and associated
exploration drilling for an estimated cost of $120 million;
(c) the completion of evaluation studies into the development of the Ranger 3
Deeps mine for an estimated cost of $55 million; and
(d) an expanded exploration program targeting highly prospective areas on the
Ranger Project Area during the period 2012 to 2014 for an estimated cost of
$40 million.
Details of the Entitlement Offer and other information described in this announcement
are also set out in an investor presentation which ERA has provided to the ASX today
(‘Investor Presentation’). The Investor Presentation contains important information,
including key risks and foreign selling restrictions with respect to the Entitlement Offer.
2
ERA’s Chief Executive, Rob Atkinson said “This capital raising will provide funding for
the three very important projects for ERA.”
“ERA takes water management very seriously. This capital allows ERA to progress
the implementation of our water management strategy, which includes the
construction of a Brine Concentrator and other initiatives, in as timely a manner as
possible.”
“It is important that ERA understands the full extent of the resources on the Ranger
Project Area and, as such, has planned to conduct an expanded exploration program
to be conducted over the period from 2012 to 2014.”
“Following the Northern Territory Government’s recent approval, site preparation work
for the Ranger 3 Deeps exploration decline will begin shortly, with construction of the
box cut and decline scheduled to commence in May 2012. In parallel, ERA will
undertake evaluation studies on the potential development of the Ranger 3 Deeps
mine.”
“ERA expects to make a decision on the Ranger 3 Deeps mine development in 2014.
At the same time, ERA will reassess its future funding requirements having regard to
the outcome of the Ranger 3 Deeps evaluation studies, the detailed rehabilitation
studies presently being undertaken and the operating and market conditions
experienced in the period to 2014.”
Overview of Entitlement Offer
Eligible shareholders with a registered address in Australia and New Zealand will be
invited to subscribe for 12 New Shares for every 7 existing ERA ordinary shares held
at 7.00pm (AEDT1) on Monday, 17 October 2011 (‘Record Date’) at the Offer Price
(‘Entitlement’).
The Offer Price of $1.53 per New Share represents a 29.8% discount to the
Theoretical Ex-Rights Price (‘TERP’).
New Shares issued under the Entitlement Offer will rank equally with existing shares.
New Shares representing the renounced Entitlements and the Entitlements of
ineligible shareholders will be offered to eligible institutional shareholders and other
institutional investors, with any proceeds in excess of the Offer Price (‘Retail
Premium’) returned pro-rata to such renouncing or ineligible shareholders.