West Wits Mining Ltd (ASX:WWI) has boosted finances by almost A$5.8 million through a rights issue as it moves quickly towards expected first production next quarter at the Witwatersrand Basin Project (WBP) in South Africa.
The non-renounceable pro-rata rights issue offer on the basis of 1 new share for every 6 shares held by eligible shareholders at an issue price of A$0.03 per share, closed on December 17.
It complements a placement to unrelated sophisticated and professional investors at A$0.032 per share that will bring in up to a further A$1.6 million.
READ: West Wits Mining has first ore from flagship Witwatersrand Basin Project earmarked for February
This funding runway will help West Wits continue to ramp-up work at WBP ahead of first ore production which is expected in the first quarter of 2021.
Rights issue details
In the rights issue the company has received acceptances, including shortfall applications, from eligible shareholders for 193,317,040 new shares, raising A$5,799,510.42 before costs.
Directors and management eligible to participate in the rights issue subscribed for 4,414,021 new shares valued at A$132,420.62 in total. Only two of the five directors were eligible shareholders.
The new shares under the issue for which acceptances have been received are expected to be issued on Friday, December 24, 2021.
$2 million shortfall
A shortfall of 68,745,796 new shares for A$2,062,373.88 in total includes an entitlement to 28,866,667 new shares for A$866,000 of Wingfield Durban Deep, LP, the largest shareholder of the company who was not eligible to participate in the rights issue.
Wingfield’s entitlement is sub-underwritten by Wingfield Capital Partners LLC, an associate of Wingfield.
The rights issue is 97% underwritten by Evolution Capital Pty Ltd and West Wits will work with the underwriter to finalise the allocation of the new shares forming the shortfall, which are anticipated to also be issued on Friday, December 24.
“Continue the momentum”
In announcing the rights issue in November, WWI 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 proceeds
Proceeds from the capital raising 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.
Evolution Capital also acted as lead manager to West Wit’s A$1.6 million placement.