Finders Resources Ltd (AIM, ASX: FND) said its broker has received firm commitments from investors for a placement of new ordinary shares totaling A$20 million at a price of A$0.33 per share, with strong demand from institutional and private investors helping to exceed the originally envisaged target of A$15 million.
The placement will be conducted in two tranches, with 16.6 million shares to be issued within one week, and the second tranche after shareholders approve it at an EGM in September.
New institutional subscribers to the placement include Taurus Funds Management Pty Ltd and Straits Resources Ltd, plus strong additional commitments from existing shareholders, including Acorn Capital and RCF, Finders said.
In addition, the company will offer a share purchase plan (SPP) to Australian and New Zealand registered shareholders to participate in the equity raising by subscribing up to A$10,000 for new shares at a price of A$0.33. If fully subscribed, the SPP would raise an approximately AUD$4.9 million additional to the current placement.
Funds raised will be applied to repaying the company's US$5.0 million debt facility which is due by December 31 2009. The balance of funds raised will be used for completion of the feasibility study at the Wetar Copper Project in Indonesia and for post feasibility work to progress the project towards full development.
Chairman Russell Fountain commented: “The retirement of our existing debt facility will simplify the company's balance sheet going forward, and the additional funding subscribed will enable us to continue on a fast track for development of the full scale Wetar copper project."