Western Areas Ltd (ASX:WSA) has entered into a subscription agreement with Panoramic Resources Limited (ASX:PAN) to acquire up to 19.9% of Panoramic’s proforma shares on issue upon completion of PAN's fully underwritten capital raising announced today.
Based on the PAN capital raising issue price of 7 cents per share, the total cash consideration payable by Western Areas will be $28.6 million.
Managing director Dan Lougher said the company was pleased to support Panoramic’s equity raising.
He said: “This investment is consistent with our growth strategy and increases our exposure to the emerging New Energy Vehicles (NEV) market dynamic.
“We are encouraged by the development potential of the Savannah North ore body and believe that Panoramic’s decision to continue to invest in capital development will position the operation well for the projected upswing in nickel, copper and cobalt demand driven by the NEV thematic.”
This investment is strategically aligned with Western Areas’ existing nickel portfolio with production from Flying Fox and Spotted Quoll, and future growth from the Odysseus development project and is consistent with the company’s strategy of investing in promising NEV focused opportunities at attractive entry points in the cycle.
Panoramic is conducting a fully underwritten institutional placement and accelerated pro-rata non-renounceable entitlement offer to raise up to $90 million.
The institutional placement of up to 410 million new fully paid ordinary shares will raise up to around $29 million and the accelerated pro-rata non-renounceable entitlement offer of up to 878 million new shares to raise up to around $61 million.
Funds will be used for operational initiatives designed to enhance the economics of the Savannah Nickel Mine, as well as de-risk its restart.
Lougher said: “The capital raising will ensure that the Savannah Project is production-ready for when a decision is made to restart operations.
´We are also excited by the near-mine and regional exploration opportunities at the Savannah Project.”
Upon completion of the capital raising, Western Areas will be granted the right, (but not the obligation), to appoint one representative to the Panoramic board.
Western Areas and Panoramic will also form a technical committee comprised of two representatives nominated by Western Areas and two representatives from Panoramic to provide technical assistance to the Savannah project.