10th Jul 2006 10:32
GVM Metals Ltd10 July 2006 The following replaces the Issue of Equity announcement released today at 10.10am under RNS number 9222F. The number of shares has been updated to 24,615,384. GVM Metals Limited Issue of Equity GVM Metals Limited ("GVM" or the "Company"), the Australian mineral processingand coal mining company with assets in South Africa, is pleased to announce thatit is proposing £3,200,000 by a placing of 24,615,384 new ordinary shares in thecapital of the Company at a price of 13p (the "Placing Price") per OrdinaryShare (the "Placing Shares"), ("the Placing"). The Placing is conditional onadmission of the Placing Shares to trading on the Alternative Investment Marketof the London Stock Exchange ("AIM"). Background to and reasons for the Placing On 30 May 2006, the Company announced that it had posted a circular toshareholders convening an EGM to approve, amongst other items: • the allotment and issue of 20,812,500 Ordinary Shares at a deemedissue price of A$0.25 each, to acquire a 74% interest in Limpopo Coal Company(Proprietary) Limited; and • the allotment and issue of up to 40,000,000 Ordinary Sharespursuant to a future fundraising by the Company in the 3 months following theEGM. All the resolutions of the EGM were passed on 28 June 2006. In 2005 GVM acquired a 49% interest in the Holfontein coal project which islocated in the Witbank coal field in South Africa. According to a CompetentPerson, Dawie van Wyk, Holfontein contains an indicated resource ofapproximately 56 million tonnes of steaming and metallurgical coal. With good infrastructure in place and an anticipated 20 year mine life, GVM'sfuture strategy at Holfontein is to complete a bankable feasibility study withits joint venture (B.E.E.) partner Motjoli Resources Pty Ltd. In April 2006, the Company acquired a 74% interest in the Limpopo coal project("Limpopo") located approximately 50km north of Rio Tinto's Chapudi Project innorthern South Africa. According to a Competent Person, Gemecs (Pty) Limited,Limpopo contains an inferred resource of approximately 352 million tonnes, againcontaining both steaming and metallurgical coal. The Company's strategy at Limpopo is to undertake a drilling programme tovalidate original mining studies, to expand existing resources and to upgraderesources to the measured category. The Placing will provide the Company with additional working capital with whichto undertake the programs on Holfontein and Limpopo. It is intended that theproceeds of the Placing will be applied as follows:- • £800,000 - balance of consideration payable for the Holfontein coal project • £400,000 - share of Holfontein's JV costs to complete a drilling program and bankable feasibility study • £1,200,000 - share of Holfontein's JV costs for mine development • £400,000 - Limpopo drilling programme • £400,000 - general working capital and costs of the issue Details of the Placing The Company is proposing to raise £3,200,000 by the issue of the Placing Sharesat the Placing Price. Corporate Synergy Plc, as agent for the Company, hasagreed to use its reasonable endeavours to place the Placing Shares at thePlacing Price with institutional and other investors, subject to the PlacingShares being admitted to trading on AIM. The Placing Price represents a discountof 3.7 per cent to the closing mid market price of 13.5p on AIM as at 6 July2006, the most practicable date immediately prior to the release of thisannouncement. The Placing Shares will, when issued and fully paid, rank pari passu in allrespects with the existing issued Ordinary Shares, and are expected to beadmitted to trading on AIM on 13 July 2006. For more information contact: Simon Farrell, Managing Director - GVM - +61 417 985 383 Leesa Peters / Abi Singleton - Conduit PR - +44(0) 20 7429 6606 Olly Cairns - Corporate Synergy Plc - +44(0) 20 7448 4400 www.gvm.com.au This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MCM.L