16th Oct 2014 10:28
LONDON (Alliance News) - W Resources PLC Thursday said it has secured investment via a convertible security and private placement facility to fund growth over the next 12 to 24 months.
The company, which focuses on tungsten, copper and gold production, exploration and development, has entered into a share purchase and convertible securities deed with Bergen Global Opportunity Fund LP, an institutional fund managed by Bergen Asset Management LLC.
The agreement allows W Resources to immediately issue a convertible security for an initial amount of USD800,000 and up to a further USD2.0 million through the placing of shares. It has given the company flexible funding by way of the USD2.8 million facility, with the option for to complete an additional placement of up to USD4.0 million.
W Resources will issue a convertible zero interest security to Bergen with a nominal value of USD800,000 with Bergen having the option to convert them into shares at any time.
The placement facility is worth USD2 million with Bergen and is to be carried out in four equal tranches of USD500,000 each. W Resources has the ability to extend the funding by eight additional tranches totalling USD4 million on the same terms.
Bergen has agreed to limitations on selling W Resource's shares, such as not to cause its affiliates to short sell W Resource's shares.
The "placement facility provides additional resources to enable further exploration and funding for fast tracking of the La Parrilla tungsten mine development in the area adjacent to and benefiting from the current tailings operational infrastructure," said the company in a statement.
"The investment is structured to fundamentally strengthen our capital structure, provide the resources for the initial development of the La Parrilla and Régua mines, and improve working capital. The initial USD800,000 zero coupon convertible security is expected to be repaid from VAT receivables, therefore minimising dilution to existing shareholders. Although we welcome the flexibility the share placement facility gives us, we currently do not anticipate drawing more than US$1 million under that facility for La Parrilla and Régua," said Chairman Michael Masterman.
Earlier Thursday, Armadale Capital PLC, an investment company focusing on African natural resources projects, said it signed a similar convertible bond deal with Bergen Global Opportunity Fund, providing funding of up to USD2.7 million.
W Resources shares were down 5.8% to 0.570 pence per share Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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