Hot Chili (ASX: HCH) has received support from leading shareholders and underpinned by Chilean resources major CAP S.A. for a A$11.7 million private placement at A$0.45 per share.
CAP also owns all the shares in Chile's largest steel producer, located in the southern city of Talcahuano. Mitsubishi is a 19.3% shareholder of CAP.
Adding a further vote of confidence to the company's operations in Chile, strong demand was also received from affiliates of Sprott Inc.
The new funds will boost Hot Chili's cash balance and ensure the company is able to continue its growth and development plan at the Productora copper project, which will be subject to a resource upgrade and Pre-Feasibility Study towards the end of 2013.
Recent results from Productora include: 102 metres at 1.2% copper equivalent; and 149 metres at 1.0% copper equivalent. Hot Chili is undertaking a 100,000 metre drilling program.
Appointment of CAP executive
Hot Chili also announced the appointment of CAP executive Roberto de Andraca Adriasola to the board of the company, as a non-executive director.
Placement breakdown
- The first tranche is the Unconditional Placement, comprising the issue of 4 million shares to raise A$1.8 million.
This portion of the raising is within the Company's 15% placement capacity and is permitted under the listing rules without shareholder approval.
- The second tranche is the Conditional Placement of 22.13 million shares to raise a further A$9.9 million.
Completion of the second tranche of the capital raising will be made subject to shareholder approval at an Extraordinary General Meeting, which will be convened as soon as possible.
Hot Chili said that the Conditional Placement is being conducted to accommodate internal approval processes of CAP.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.