West Wits Mining Ltd (ASX:WWI) shares surged more than 20% higher intra-day after entering into an equity financing facility with SBC Global Investment Fund to raise up to $75 million.
SBC has a global mandate and a particular focus in resource companies with leverage to commodity prices.
The agreement provides WWI with up to an aggregate maximum of $75 million of standby equity capital over 2 years.
Attracting global interest
The agreement continues WWI’s extension into the North American and overseas investor markets, having previously secured US cornerstone investor Wingfield Capital Partners, with the company attracting global interest as the 4.28 million ounces Witwatersrand Basin Project (WBP) transitions into production.
In addition to the $75 million equity agreement, WWI is advancing its core debt funding program via African focused corporate adviser, Taurum International, to secure project finance for the WBP.
WWI chairman Michael Quinert said: “We are pleased to secure the agreement with North American investor SBC Global Investment Fund which provides the company flexibility to manage capital requirements whilst focusing on the longer strategic financing for development of the WBP.
“The agreement extends the company’s reach into the North American market with the investor having a clear view of the strong upside potential offered by WWI’s marque 4.28Moz gold project.”
Drawdowns of the $75 million equity are at WWI’s sole discretion as to size and timing and provides meaningful flexibility for WWI’s growth into a mid-tier gold miner.
Under the agreement, WWI retains full control of all aspects of the subscription process, having discretion as to whether or not to request share placements to SBC, the timing of such share placements and the maximum number of shares to be requested to be issued under each share placement.
Other terms of the placement
No single placement under the facility can exceed a maximum of 9.99% of WWI shares on issue unless there is mutual consent to exceed that limit, nor result in the aggregate number of shares held by SBC exceeding 14.99% of the number shares on issue in WWI.
If WWI does not meet these conditions in respect of a placement, then that placement will not be requested.
WWI will also retain the flexibility to secure its core funding requirements via conventional corporate financing transactions, such as debt, equity, streaming and royalty financings, which are all allowed as being beyond the scope of this agreement.
To that end, WWI through Taurum International is continuing to advance its debt and core funding objectives and this agreement is seen as supplementing rather than as replacing that initiative.