West Wits Mining Ltd (ASX:WWI) has launched an underwritten rights issue and placement to raise around A$9.3 million as it accelerates towards first production at the Witwatersrand Basin Project in South Africa.
The gold explorer and project developer is offering one new share for every six currently held, priced at A$0.03 to raise up to A$7.86 million before costs in the rights issue.
In addition, a placement to unrelated sophisticated and professional investors at A$0.032 per share will bring in up to a further A$1.6 million.
The funding runway will help WWI ramp up work ahead of its first ore production, expected in quarter one of 2022.
Keeping up momentum towards first production
West Wits managing director Jac van Heerden said: “Following the granting of the mining right and completion of the Qala Shallows (Stage 1) definitive feasibility study in quarter three, 2021, West Wits has rapidly advanced site establishment, mine development and the Early Mining Initiative at the Witwatersrand Basin Project in South Africa.
“The additional funding will allow us to continue the momentum towards first ore production scheduled for quarter one, 2022, in addition to progressing our exploration at the Mt Cecelia Project in Western Australia.
“The near fully underwritten rights issue gives the company great confidence and provides a significant opportunity for our shareholders to participate in funding the WBP’s ramp up into production, while the company advances debt funding initiatives to take the WBP towards full-scale operations.”
Use of funds
The funds raised under the placement and rights issue will be used for:
- Mine development, the early mining initiative, exploration and stage two and three feasibility studies at the Witwatersrand Basin Project;
- Progressing exploration activities at the Mt Cecilia project; and
- Meeting general working capital requirements.
Underwritten rights issue
Evolution Capital Pty Ltd has underwritten West Wit’s one-for-six rights issue to just more than $7.6 million.
That equates to 253.33 million shares or 97% of the securities to be issued.
Wingfield Capital Partners LLC — an entity associated with West Wits’ biggest shareholder, Wingfield Durban Deep, LP — has agreed to sub-underwrite $866,000 of the underwritten amount under the rights issue.
Ultimately, this amount represents Wingfield Durban Deep’s entitlement if it had been eligible to participate.
The company reserves the right, in consultation with Evolution, to seek to place any shortfall from the rights issue within three months of the closing date.
An indicative timeline is outlined below:
Placement
Evolution also acted as lead manager to West Wit’s $1.6 million placement.
The $0.032 issue price represents a 21% discount to the 15-day volume-weighted average price of WWI shares prior to the date of Wednesday’s announcement.
In addition, investors have the chance to pick up one free-attaching option for every two shares subscribed for under the placement.
The options are exercisable at $0.12 and are set to expire on August 10, 2022.
Due to the placement capacity currently available under listing rules, WWI has agreed with certain placement participants that 1.56 million free-attaching options will issued be following shareholder approval.
The remaining 48,437,500 options will be released on or around November 22 under the existing placement capacity.
Evolution will secure a further 15 million options in exchange for its placement services.