30th Jan 2009 07:00
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ALBIDON LIMITED |
Level 1 |
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62 Colin St |
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West Perth 6005 Western Australia ARBN 107 288 755 Tel:+6189211 4600 Fax: +6189211 4699 Email:[email protected] ASX Code: ALB AIM Code: ALD |
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30 January 2009
US$26M FUNDING PACKAGE FOR ALBIDON
The Board of Albidon Limited ("Albidon" or the "Company") is pleased to advise that it has reached agreement in principle for up to US$26M in funding from Pacific Road Resources Funds ("PRRF"), a large private investment fund specialising in investing in mining projects worldwide.
Funding Summary
The proposed funding is via five year, zero coupon loan notes with attaching warrants ("Convertible Notes") in three tranches. The Convertible Notes will be unlisted. The major terms of the funding are as follows:
Tranche 1: issue of 110 million Convertible Notes to raise US$6M by 28 February 2009 at a conversion strike price of A$0.08 per share. PRRF will have the right to nominate up to two directors upon completion of Tranche 1.
Tranche 2: issue of approximately 92 million Convertible Notes to raise US$10M by 30 June 2009 at a conversion strike price of A$0.16 per share.
Tranche 3: issue of Convertible Notes to raise US$10M by 30 September 2009 at a conversion strike price to be determined based on a 10% discount to the Company's 30 day Volume Weighted Average Price during the month of September 2009.
The funding is to be used solely for working capital and ramp-up costs at the Munali Nickel Project.
Conditions Precedent
The proposed funding of Tranche 1 is conditional upon a number of items including the following:
Raising an additional US$5M in equity simultaneously with the Tranche 1 funding of US$6M. Discussions with major shareholders and other interested parties have commenced.
Renegotiating debt repayment terms and obtaining waivers from secured and subordinated lenders. As advised in previous announcements, certain concessions have already been sought from lenders.
PRRF finalising its already extensive due diligence.
Receiving all necessary approvals including shareholder approval for the full funding package at a General Meeting.
Agreeing certain cost and productivity targets with the Munali Project's mining contractor. These negotiations are underway.
Completion of detailed documentation.
The proposed funding of Tranche 2 is conditional upon meeting a range of key physical and cost performance indicators in the Munali Project's 2009 operating plan. These key performance indicators are presently being finalised with PRRF.
The proposed Tranche 3 funding is optional on the part of PRRF.
Timetable
The indicative timetable for the funding transactions is as follows:
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Approx. Date |
Action |
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9 February 2009 |
Notice of General Meeting |
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10 February 2009 |
Unconditional funding for US$5M equity raising |
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20 February 2009 |
Final consents/waivers from lenders and other stakeholders |
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24 February 2009 |
General Meeting of Shareholders |
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25 February 2009 |
Settlement of US$6M Convertible Notes and US$5M equity raising |
Pacific Road Resources Funds
Summary
The Board is pleased to have secured this funding in a difficult market. The Board remains confident that the Munali Project's ramp-up issues can be addressed and this confidence has been confirmed by PRRF's intention to invest in Albidon despite current depressed nickel prices.
PRCM's executives have strong mining expertise which will assist in the performance of the Munali Project for the benefit of all shareholders.
CONTACTS
If you have any queries please contact Alasdair Cooke and Paul Chapman on +61 8 9211 4600 or email [email protected].
Albidon's nominated adviser is RFC Corporate Finance Ltd, contact Stephen Allen +61 8 9480 2500.
Additional information may also be viewed on Albidon's website at www.albidon.com.
Related Shares:
ALD.L