Matilda Zircon Raises A$4m for Development of Zircon Projects
Post Date: 28 Jun 2011 Viewed: 513
Matilda Zircon has raised A$2 million through a placement of 100 million shares at $0.02 each to advance its two mineral sands projects at the Tiwi deposits in the Northern Territory and at Keysbrook in Western Australia.
The placement of the shares will be together with one free attaching option exercisable at $0.025 for every two shares subscribed. The options expire on 31 December, 2013.
The placement was made to clients of lead manager Indian Ocean Capital.
In addition, Matilda's major shareholder, Stirling Resources (ASX: SRE), with the support of its parent entity DCM DecoMETAL GmbH, has agreed to lend the company $2 million.
This loan is provided on the basis that it will be converted into Matilda shares at the same price as the placement, and will have options attached on the same terms as the placement.
All shares and options to be issued as a result of the placement and the loan arrangement will be issued subject to the approval of Matilda shareholders at a meeting scheduled for early August 2011.
Settlement of the placement will take place this week and Matilda will immediately seek listing approval of the shares.
The proceeds of the placement and loan will be used for ongoing development of Matilda's Lethbridge South project on the Tiwi Islands, pre-development work on the Company's Keysbrook project, transaction costs and general working capital purposes.
Soaring world prices for zircon and rutile has significantly increased the production and revenue forecasts for the Lethbridge South Mine.
The higher prices allowed Matilda to re-optimise the mine plan by lowering the cutâ€off grade, which provided a 22% boost in reserves at Lethbridge South to 28,650 tonnes of heavy minerals. With the increasing prices, sales revenue would also be expected to rise for the company.
Upon approval, Matilda plans to start construction at Keysbrook in 2011 and mining in late 2012 / early 2013. Mining is planned to continue at Keysbrook for at least 8 years.
Zircon is primarily used to produce ceramic and porcelain products, with demand driven by global urbanisation trends, particularly in countries such as China and India.