Focus Minerals Ltd.

Published : February 24th, 2009

Landmark A$28M Capital Raising To Fund Aggressive Growth Strategy

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Focus Minerals Limited (ASX: FML)

 

ASX RELEASE                                                                                                                               24 February 2009

 

LANDMARK A$28M CAPITAL RAISING TO FUND AGGRESSIVE GROWTH STRATEGY

 

KEY POINTS

 

         $A25M to be raised via the issue of 1,250M shares at an issue price of 2 cents per share to sophisticated investors

         Up to A$3M to be raised from existing Shareholders under the Share Purchase Plan (SPP)

         $A18M allocated to refurbish and modernise the 100%-owned 1.2Mtpa  Three Mile Hill treatment facility to significantly increase overall milling capacity in conjunction with existing toll treatment agreement with nearby Greenfields mill

         Balance of funds to be allocated to aggressive development and exploration aimed at bringing nearby deposits into production as quickly as possible to take advantage of high gold prices

         Campbell Baird to assume the position of Chief Executive Officer with Peter Williams to be based full-time in Coolgardie to oversee the Three Mile Hill refurbishment in the role of Chief Operations Officer

         Capital raising and personnel changes set to usher in a new era for Focus Minerals at a time of unprecedented opportunities within the gold industry

Australian-based gold producer Focus Minerals Ltd (ASX:FML) (Focus or Company) is pleased to advise that:

 

(a)   It has resolved to raise A$25 million through the issue of to 1,250 million ordinary shares at an issue price of $0.02 per share to sophisticated investors (Share Placement); and

.

(b)   following completion of the Share Placement, it plans to raise up to A$3 million through the issue of up to 150 million shares to existing shareholders at an issue price of $0.02 each under the Company's Share Purchase Plan (SPP Offer) using the Company's capacity under Listing Rule 7.1,

 

Capital Raising

 

The Share Placement will occur in two tranches as follows:

 

(a)   100 million Shares to be issued using the Company's existing capacity under Listing Rule 7.1 to raise A$2 million; and

(b)   subject to Shareholder approval, the issue of up to 1,150 million Shares to raise A$23 million.

 

The Capital Raising will allow Focus to accelerate growth and development of the Coolgardie Gold Project, where the Company is aiming to establish a long-term sustainable production base of 100,000 ounces per annum.

 

The decision to undertake the Capital Raising to fast-track the refurbishment and modernisation of the Company's 1.2Mtpa Three Mile Hill treatment facility (Plant Refurbishment) follows recent increases in the Company's gold resource base - including a significant upgrade at the Company's Brilliant Deposit and ongoing successful exploration and development programs.

 

This decision is supported by the current strong gold price environment, which is creating unprecedented opportunities for gold producers to make significant margins. The Board has determined that this strategy represents the best option for the Company in terms of enhancing shareholder wealth, rather than utilizing cash flow from existing operations - which would effectively delay the implementation of this growth strategy by 12-14 months.

 

Perth-based corporate advisory firm Azure Capital Pty Ltd has been appointed as Corporate Advisor and Lead Manager to all aspects of the Capital Raising and Patersons Securities Limited will act as Broker to the Capital Raising.

 

 

Capital Raising

 

Subject to obtaining the necessary shareholder approval, the Capital Raising comprises of:

 

(a)               the placement to institutional and "sophisticated" investors 1,250 million shares at an issue price of $0.02 each to raise $25,000,000; and

(b)               the offer of up to 150,000,000 shares at an issue price of $0.02 each to shareholders pursuant to the Company's Share Purchase Plan to raise up to $3,000,000.

The issue of shares under the SPP Offer will occur after completion of the Share Placement using the Company's capacity under Listing Rule 7.1.

The Share Purchase Plan will be processed in priority of receipt until the allocation has been completed. Details of the SPP Offer and entitlement forms will be mailed to shareholders shortly. Azure Capital have also agreed to place any shortfall arising on the SPP Offer on a best endeavours basis.

 

USE OF FUNDS

 

A significant proportion of the funds raised (approximately A$18 million) will be used to fund the Plant Refurbishment.

 

Funds raised will also be applied to ongoing exploration across the extensive 210km� tenement holding, whereby Focus currently has an estimated 111,000 ounces of gold in Probable Reserves (depleted basis as at 31 December 2008) at the Perseverance and Countess deposits and approximately 1.8 million ounces in the Measured, Indicated and Inferred JORC-compliant resource contained in several surrounding deposits, including the recently upgraded Brilliant Deposit.

 

 

 

 

The breakdown of the allocation of funds is as follows:

 

-         Plant refurbishment                                                              A$18.0 million

-         Resource development                                                          A$ 4.6 million

-         Advanced  exploration and definition                                  A$ 3.8 million

-         Capital Raising Costs                                                             A$ 1.6 million

 

            Total                                                                                        A$28.0 million

 

 

THREE MILE HILL REFURBISHMENT

 

The Plant Refurbishment will underpin Focus' expansion plans, giving the Company much greater flexibility in combination with the arrangements currently in place with Higginsville Mining's nearby Greenfields processing plant.

 

With recent upgrades to the Company's overall resource base, including an increase in Probable Reserves at the Perseverance and Countess Deposit, the Board has decided that an increase in processing capacity is required in order to sustain greater levels of production expected in the near future. The re-commissioning of the Three Mile Hill plant is expected to provide an efficient and cost-effective means of ramping up production as new deposits are brought into production.

 

It is expected that the Plant Refurbishment will take between 8 and 10 months resulting in an annual milling capacity of 1.68 million tonnes per annum in combination with the Greenfields treatment facility.

 

DEVELOPMENT PIPELINE

 

To complement the Plant Refurbishment, Focus will immediately undertake a major resource definition and extension program to ensure resources are brought on line to feed the 1.2Mtpa capacity of Three Mile Hill on its re-commissioning.

 

Initially, priority will be given to the development of additional resources at the currently producing Perseverance and Countess Deposits, with a drilling programme expected to be completed shortly at Perseverance, targeting southern extensions to the high-grade orebody.

 

In the medium term, Focus will step up exploration and pre-feasibility studies at other nearby high-grade deposits including Empress (Inferred Resource of 47,000oz at 4.68g/t Au), The Mount (Indicated Resource of 370,000oz at 5.50g/t Au) and Cyanide (Indicated Resource of 65,000oz at 5.54g/t Au). These deposits are targeted for production by the first Quarter of 2010.

 

Following this, the Brilliant, Dreadnought and Lindsays Deposits will be developed to provide additional ore to feed the Three Mile Hill Plant, which is expected to be in operation from early 2010.

 

Hedging and Debt

 

Only a small portion of production (26,000 ounces) remains to be delivered into existing hedge contracts, with the balance being sold into the spot market. It is expected that the outstanding hedge position will be fully closed out by September this year.

 

Additionally, the Company is expected to be entirely debt free by December 2009, including Convertible Note obligations to Focus' former Joint Venture partner Committee Bay Resources and repayment of an $A18.6 million debt facility held with Investec Bank (Australia) of which $A12.25 million is currently outstanding.

 

KEY SENIOR MANAGEMENT APPOINTMENTS

 

As part of Focus' strategic expansion plans, Managing Director Mr Peter Williams has resolved to relocate to Coolgardie in the role of Chief Operations Officer to oversee the Plant Refurbishment, as well as the continuing extensive programme of exploration and development within the various high-priority targets within the Coolgardie Gold Project.

 

Mr Williams' considerable experience in the management and development of mineral assets, as well as his intimate knowledge of the Coolgardie operation underpinned his decision, which was supported by the Board as an important strategic move to oversee the smooth development of Three Mile Hill.

 

Mr Campbell Baird, who currently holds the position of Chief Operating Officer, will assume the position of Chief Executive Officer in order to oversee the company's rapid growth into a mid tier gold producer.

 

For additional background information on Mr Baird, please refer to ASX release dated 14 January 2009.

 

SUMMARY

 

The Board has resolved to fast-track the development of the Company's resource base and production profile through the re-commissioning of the Three Mile Hill plant as a result of a number of compelling factors, which are outlined above.

 

Commenting on the Capital Raising and development plans, Focus Chairman Don Taig said: "These funds will provide Focus with the opportunity to substantially ramp-up production at Coolgardie, elevating us to a new level in terms of our position among gold producers in Australia.

 

"Our priority now is to ensure that the Three Mile Hill plant is completed on time and within budget and, to this end, the decision by Peter Williams to relocate full-time to Coolgardie was unanimously supported by the Board,'" he added.

 

"Peter has undertaken to relinquish his role as Managing Director to concentrate on the task of refurbishing the Three Mile Hill plant as well as bringing near-term ground into production. Peter's vast experience, built up over 30 years in the industry, places him in the best position to undertake this role and I thank him for placing the interests of Focus Minerals above his own personal interests," he said.

 

"I would also like to welcome Campbell Baird to the position of Chief Executive Officer. Campbell has a wealth of experience and I have no doubt that he will add significant value to Focus with his commercial expertise and attention to detail."

 

A Notice of Meeting to seek the necessary shareholder approval is currently being prepared and will include an explanatory memorandum. These materials will be distributed to shareholders as soon as practically possible.

 

 

ENDS

 

Released by:

On behalf of:

Nicholas Read/Jason Cunningham

Don Taig, Executive Chairman

Read Corporate
Focus Minerals Ltd

Telephone: (+61-8) 9388-1474

Telephone: (+61-8) 9215-7888

www.readcorporate.com.au

Web: www.focusminerals.com.au

 

 

 

 

READ CORPORATE
Public Relations Corporate Communications
T: (+61-8) 9388-1474 | F: (+61-8) 9388-1472 | E: info@readcorporate.com.au | Web: www.readcorporate.com.au 

PLEASE NOTE:

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Focus Minerals Ltd.

PRODUCER
CODE : FML.AX
ISIN : AU000000FML4
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Focus Min. is a gold development stage company based in Australia.

Focus Min. holds various exploration projects in Australia.

Its main assets in production are COOLGARDIE, TINDALS MINING CENTRE and MOUNT GOLD in Australia and its main exploration properties are NEPEAN MINE, MOUNT (REDEMPTION JV), LAKE COWAN and TREASURE ISLAND in Australia.

Focus Min. is listed in Australia and in Germany. Its market capitalisation is AU$ 47.5 millions as of today (US$ 34.3 millions, € 30.0 millions).

Its stock quote reached its highest recent level on March 05, 2004 at AU$ 9.75, and its lowest recent point on March 13, 2020 at AU$ 0.15.

Focus Min. has 182 750 000 shares outstanding.

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Annual reports of Focus Minerals Ltd.
FY12 Annual Report & September Quarterly Report
Nominations of Focus Minerals Ltd.
7/5/2011Crescent Directors Accept the Focus Offer
4/20/2011Appoints two new directors to board
1/14/2009Appointment of Chief Operating Officer
3/4/2008 Appoints Mining Contractor, Signs Toll Treatment Agreement ...
Project news of Focus Minerals Ltd.
7/11/2011June Gold Production up 34%
6/8/2011Open Briefing: CEO on Production Ramp-Up and Outlook
5/23/2011(Tindals Mining Centre)Commences production at Tindals open pits
4/19/2011(Tindals Mining Centre)Commences development of three new open pits at Tindals Mini...
3/17/2011(Mount Gold)Production set for significant boost as mining starts at The...
3/4/2011(Treasure Island)Focus acquires remaining stake in Treasure Island gold proje...
3/1/2011(Tindals Mining Centre)High-grade results point to more open pit resources at Tinda...
2/10/2011(Tindals Mining Centre)Resources upgrade and bumper drilling results highlight stro...
1/24/2011(Coolgardie)High-grade intercepts at Big Blow strengthen Tindals open pi...
1/12/2011(Coolgardie)Hits target with production of 21,000oz in December quarter
6/15/2010Acquires High-Grade Gold-Copper Project in WA
9/7/2009(Mount (redemption Jv))Poised to Become Significant Mid-Tier Gold Producer After Se...
9/7/2009(Mount (redemption Jv))Commencement of Mining at The Mount
8/11/2009(Tindals Mining Centre)High Grade Intercepts at Tindals Mining Centre
8/11/2009(Tindals Mining Centre)Exploration Drilling Delivers Further High-Grade Gold Interc...
2/12/2009(Coolgardie)80% Increase in Gold Resources at Brilliant Deposit, Coolgar...
5/28/2008Commencement of Nepean Drilling Programme to Underpin Ongoin...
4/29/2008(Coolgardie)Delivers Maiden Gold Pour at Coolgardie Project, Western Aus...
4/3/2008(Perseverance) Upgraded Gold Reserves at Perseverance Gold Deposit Boosts ...
4/2/2008(Nepean Mine)Outstanding High-Grade Nickel Intercepts Enhance Nepean Proj...
3/26/2008(Coolgardie)Substantial Resource Upgrade for Countess Gold Deposit, Cool...
3/7/2008(Coolgardie)unveils $64m Strategy to Buyout Cooolgardie Gold JV
2/19/2008(Coolgardie)Further Resource Upgrade for High-Grade Perseverance Gold De...
Corporate news of Focus Minerals Ltd.
6/9/20162015 Annual Report
4/29/2016March Quarterly Activities and Cashflow Report
4/29/2016Coolgardie and Laverton Exploration Update
4/18/20162015 Annual Report
3/31/20162015 Full Year Financial Accounts
1/29/2016December 2015 Quarterly Activities and Cashflow Report
1/27/2016More Evidence of Significant System at Karridale
11/17/2015Maiden High Grade Resource For Bonnie Vale
10/29/2015September 2015 Quarterly Activities and Cashflow Report
10/16/2015Bonnie Vale Resource Modelling Commences
8/25/2015Correction to Quarterly Activities and Cashflow Report
7/29/2015June 2015 Quarterly Activities and Cashflow Report
7/24/2015Coolgardie Exploration Update: Bonnie Vale Continues to Deli...
4/13/2015Laverton Exploration Update
3/31/2015Focus Minerals Limited – Financial Report YE 2014
2/11/2015Coolgardie Exploration Update
2/11/2015Focus Minerals Ltd December 2014 Quarterly
12/4/2013Director Retirement
12/4/2013AGM Address
2/5/2013Management Change
1/31/2013December Quarterly Report
9/28/2012FY12 Full Year Results
8/7/2012Diggers & Dealers Presentation
10/13/2011Crescent Gold Board Changes
9/1/2011Launches iPad App on the Apple iTunes Store
8/3/2011Relevant Interest Over 50% in Crescent
6/29/2011and Crescent Release Their Bidder's and Target's Statements
6/20/2011Takeover of Crescent Gold by Focus Minerals
4/14/2011On track to accelerate growth plans after completing $7m SPP...
2/7/2011To report 28% rise in interim profit to $6.2M
1/31/2011December 2010 Quarterly Report
8/24/2010Profit Guidance - Record full year net profit
7/29/2010June 2010 Quarterly Activities Report
7/29/2010Quarterly Report for the Period Ending 30 June 2010
7/16/2010Outstanding Copper Grades from Sampling at Treasure Island
7/7/2010On Track to Produce 80,000oz for Calendar Year 2010 - Over 4...
6/3/201080% Increase in Gold Resources at Cyanide Deposit
4/30/2010March 2010 Quarterly
4/30/2010Activities Report For The Quarter Ended 31 March 2010
3/4/2010Delivers First Half A$4.9m Interim Net Profit
1/28/2010Activities Report For The Quarter Ended 31 December 2009
1/27/2010Signs Deal with La Mancha
11/26/2009Market Update
11/9/2009Record Milling Campaign Delivers Gold Production of ~ 21,900...
10/27/2009September Activities Report
10/19/2009Audio Presentation to the Australian Gold Conference
9/17/2009 (Audio) Focus Announces Maiden 2009 Year Net Profit - Mr Ca...
9/9/2009(Audio) Emerging Mid-Tier Gold Producer Steps Closer to Prod...
8/12/2009Signs Mill Treatment Exclusivity Agreement with Matsa Resour...
7/29/2009(Audio) Board Room Radio Broadcast
7/23/2009June Quarterly Activities Report
6/30/2009Delivers Record Gold Production of 19,226oz From Recent Mill...
2/24/2009Landmark A$28M Capital Raising To Fund Aggressive Growth Str...
1/23/2009 Activities Report for the Quarter Ended 31 December 2008
12/1/2008(Tindals Mining Centre)69% Increase in Probable Ore Reserves at Tindals Mining Cent...
11/26/2008Chairman's Supplementary Statement - AGM 25th November 2008
7/29/2008June Quarterly Report
5/1/2008Completes Settlement of JV Acquisition
5/1/2008Quarterly Activities Report
3/11/2008Completes $14M Placement, Announces Details of Share Purchas...
1/31/2008December 2007 Quarterly Activities Report
1/31/2008Enters into Exclusivity Agreement to Negotiate the Proposed ...
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AUSTRALIA (FML.AX)FRANKFURT (FZA.F)
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