Debt woes forces cash raise on Walkabout
PERTH (miningweekly.com) – Junior Walkabout Resources is hoping to raise A$33.17-million in a rights issue to complete construction of its Lindi Jumbo graphite mine, in Tanzania.
The company on Monday announced that the capital raise had been necessitated by a delay in debt drawdown from CRDB Bank, in Tanzania, and while the company was actively seeking to finalise the debt drawdown, it was necessary to raise equity capital to be used as either further loan collateral or to directly fund the mine.
Under the capital raise, Walkabout would undertake a pro-rata renounceable entitlement issue of two fully paid ordinary shares for every three shares held, at an issue price of 11c a share, with a minimum raising of A$16.5-million.
The issue price represented a 48.8% discount to Walkabout’s last closing price on May 30, and a 36.5% discount to its theoretical ex-rights price.
The rights issue is expected to close on September 20, unless extended.
The funds raised would enable Walkabout to fully fund the construction and commissioning of the Lindi Jumbo project in the first quarter of 2023, ahead of a ramp-up of graphite production.
The company is also undertaking several active parallel funding initiatives, including the continuation of the negotiations towards drawdown of the $20-million CRDB debt facility. Lindi Jumbo received a commitment from CRDB to allow for a 1-for-1 drawdown on the posting of cash as collateral.
The other funding options currently being negotiated include prepayment on product offtake, alternative secured debt, and a structured loan facility. Depending on the success of these alternative initiatives, Walkabout may not require the full amount to be raised through the rights issue.
Walkabout noted on Monday that 77% of the cost of the engineering, procurement and construction contract had already been incurred at Lindi Jumbo.
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