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Horizonte Minerals Plc (TSX:HZM)(LSE:HZM )announces that it has closed its previously announced Canadian public offering of ordinary shares of the Corporation and concurrent private placement offering in the United Kingdom of ordinary shares (the “Private Placement Shares”) of the Corporation.
A total of 50,000,000 Offered Shares have been issued and 41,287,608 Private Placement Shares will be issued at a price of C$0.11 per Offered Share and 6 pence per Private Placement Share (being the approximate Sterling equivalent of the Offering Price) respectively, for aggregate gross proceeds to the Corporation of C$10,060,000.
Under the Concurrent Private Placement, Teck Resources Limited, a substantial shareholder in Horizonte, has agreed to subscribe for 18,115,942 ordinary shares.
The net proceeds of the Offering, together with the net proceeds of the Concurrent Private Placement, will be used by the Corporation to fund the Feasibility Study on the Araguaia nickel project.
The Offered Shares were sold pursuant to an agency agreement with Paradigm Capital Inc. The Corporation has also granted to Paradigm an option, exercisable in whole or in part at the sole discretion of Paradigm for a period of 30 days, to purchase up to an additional 7,500,000 Offered Shares, to cover over-allotments, if any, and for market stabilization purposes. If the Over-Allotment Option is exercised in full, the Corporation will receive additional gross proceeds of C$825,000.
Horizonte Minerals CEO Jeremy Martin said, “We are pleased to have successfully closed this C$10 million fundraise, having received a strong response which reflects the quality of the Araguaia Project. The funds raised through our existing shareholders which include Teck Resources and Henderson Global, and new institutional investors both in the UK and Canada, will see us well financed to deliver a Feasibility Study at Araguaia as we look to develop Brazil’s next major nickel project. The Company is now well positioned to advance the project in parallel with a positive nickel market which has seen the nickel price increase since January 2014 making it the best performing metal this year to date, and in light of this I believe Horizonte is in a strong position to deliver significant value over the next 24 months.
“Araguaia is initially targeting 15,000tpa nickel in ferronickel production over a 25 year mine life utilising the proven pyrometallurgical process of Rotary Kiln Electric Furnace technology. The project has a Net Present Value of US$519 million and an Internal Rate of Return of 20%. These robust economics are also underpinned by the high nickel grades, with an average feed grade for the first 10 years of 1.76% Ni, placing the deposit in the upper quartile for grade globally. Furthermore Araguaia is located in a mining region which has good infrastructure in place including rail, road, water and power. We look forward to providing further market updates as we start the Feasibility Study work programmes.”
The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of these securities, in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful.
Settlement Details:
The Concurrent Private Placement is subject to certain conditions including, but not limited to, the admission of the Offered Shares and Private Placement Shares to trading on AIM, a market operated by the London Stock Exchange, and the listing and posting for trading of such shares on the Toronto Stock Exchange. Applications have been made for the Admission. The Offered Shares and the Private Placement Shares will, when issued, rank pari passu in all respects with the existing ordinary shares of the Corporation.
Admission will take place in two tranches. The first tranche comprises 73,171,666 ordinary shares (being all of the Offered Shares and the Private Placement Shares less the Teck Placing Shares) for which admission to trading on AIM is expected on 1 August 2014. The second tranche comprises the Teck Placing Shares and is conditional on admission of the First Shares. Admission of the Teck Placing Shares is expected on 4 August 2014.
Following Admission of the Teck Placing Shares, the Corporation’s share capital will consist of 492,427,105 ordinary shares of 1 penny each, all with voting rights. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Corporation under the United Kingdom Financial Conduct Authority’s Disclosure and Transparency Rules.
Teck’s Participation:
Teck currently holds 170,573,987 ordinary shares in the Corporation, representing 42.5 per cent of the current issued share capital. As part of the Concurrent Private Placement, Teck has agreed to subscribe for 18,115,942 Private Placement Shares representing 19.8 per cent of the new ordinary shares being issued in the Offering and Concurrent Private Placement. Assuming all the Offered Shares and Private Placement Shares are issued as currently envisaged, Teck’s holding in the enlarged issued share capital would be 188,689,929 ordinary shares, representing 38.3 per cent of the enlarged issued share capital immediately following Admission.
In order to eliminate the unexpected possibility of Teck’s percentage interest in the Corporation’s ordinary shares increasing following Admission, and thus triggering a mandatory offer under Rule 9 of the UK City Code on Takeovers and Mergers (the “Code”) for the remaining issued and to be issued ordinary shares, it has been decided that Admission will occur in two tranches. The First Shares will admit to trading on AIM on 1 August 2014 and the Teck Placing Shares will be admitted to trading on AIM on 4 August 2014 conditionally upon Admission of the First Shares having become effective and payment having been received in respect of them.
While an increase of Teck’s percentage interest would, prima facie, trigger a mandatory offer under Rule 9 of the Code, the Panel has agreed, based on the intention of the parties, to waive the requirement in this instance.
