This share subscription agreement with SIMEC will fully fund Havilah’s work programs for its iron ore assets and copper prospects in the Mutooroo Copper-Cobalt District in South Australia’s northeast.
The arrangement includes the company’s Mutooroo deposit and iron ore deposits in the nearby Grants Basin and provides a clear pathway to potential commercialisation.
Strategic partnership with GFG
It establishes a strategic partnership with GFG, a successful international group which owns the Whyalla Steelworks and iron ore export facilities.
GFG has the capacity to support and facilitate the future growth of Havilah through access to global capital markets, capital investment, technical assistance and commercial offtake agreements.
Havilah’s non-executive chairman Mark Stewart said: “The proposed transformational transaction announced today is the culmination of extensive discussions and technical co-operation between Havilah, SIMEC and GFG since the middle of 2018.
“This co-operative and patient approach to explore alternatives, test ideas and understand value propositions has paid off with a clear win-win outcome for both parties.
“It demonstrates a shared view of the inherent value of Havilah and its potential, combined with GFG’s confidence in the long-term growth prospects inherent in Havilah’s extensive tenement package in the Curnamona Craton.
“The Havilah board believes the strategic alliance with GFG will strengthen Havilah’s ability to generate value from its multi-commodity portfolio through discoveries, project development and further transactions.”
Funding will be provided via a series of equity placements in Havilah at a premium up to 35%, over an expected period of three years, potentially providing GFG a 51% stake in Havilah if all equity placements are made.
Pro-rata rights issue
A discounted pro-rata rights issue will be offered to shareholders, after shareholder approval, but prior to any placement to GFG.
The transaction will position Havilah as a fully-funded minerals explorer and developer.
It provides the opportunity to rapidly advance two of Havilah’s major projects to production at a scale and within a timeframe to meet GFG’s ambitious growth plans in South Australia.
Staged equity investment
The investment consists of a committed staged equity investment in Havilah of $50 million, plus a further $50 million in conditional or discretionary funding.
Funds will be applied via agreed work programs to advance the projects to completed DFS over an anticipated and relatively short three-year period, as well as potentially providing funding for exploration, corporate and administration costs.
Chairman of Liberty House and CEO of GFG Alliance Sanjeev Gupta said: “We have been extremely impressed with Havilah since we began working with them last year, and this is a great opportunity for us to build upon that partnership to help realise our vision for our Next-Gen steel plant, for our ambitious Whyalla Transformation project and for realising South Australia’s tremendous copper potential.”
Havilah’s directors consider this to be a compelling opportunity:
- It provides access to capital that will allow Havilah to confidently advance two of its key projects to DFS milestones within the next three years;
- Project value creation remains within Havilah for the benefit of shareholders;
- A strategic alliance with GFG which has already made a significant investment commitment in South Australia;
- Havilah maintains control of its destiny and its projects as an independently directed and managed ASX listed entity;
- Opens the door to international capital markets and commercial support that would otherwise not be available;
- Access to an end user steelworks and export facility at Whyalla facilitating potential development of iron ore projects;
- Methodical exploration of the highly prospective Mutooroo Copper-Cobalt District, for the first time in Havilah’s history, with excellent discovery prospects;
- Opportunity for shareholders to participate on attractive terms via a pro-rata rights issue;
- Havilah will continue to seek the best investment options for Kalkaroo and will maintain an active regional exploration program on its high conviction targets; and
- Flexible investment terms that are governed by Havilah’s achievement of a series of technical milestones and agreed targeted project economics.
The GFG Alliance is a London-headquartered international group of businesses, founded and owned by the British Gupta Family, with annual revenue of over US$15 billion and around 15,000 staff.
It combines energy generation, metal manufacturing, engineering, natural resources and financial services, working together to deliver a common business strategy.