Australian Potash Ltd (ASX:APC) has received firm commitments for $7 million through a placement of shares at an issue price of 11.1 cents to drive the Lake Wells Sulphate of Potash (SOP) Project in Western Australia towards production.
The placement, which saw the issue of more than 63.063 million shares, was oversubscribed with strong demand from institutional and professional investors.
These placement shares will be issued on the same terms as and will rank equally in all respects with, the existing fully paid ordinary shares in the company.
Placed “exceptionally well”
Managing director Matt Shackleton said: “APC is very pleased by the high demand and institutional investors taking note before key catalysts materialise over the coming quarter.
“The strong support for the placement is a testament to our Lake Wells SOP Project’s appeal as one of this state’s pre-eminent mining-agri projects, positioned as a low-cost, high-return, ultra-low carbon-emitting SOP project, which sits comfortably in the lowest quartile of the global cost curve
“The placement delivers a strong balance sheet for the company.
“Finalising the EPA approvals pathway, presenting further offtake agreements and finalising the syndicated debt facility, with NAIF, commercial lenders and recently EFA now rounding out due diligence, positions the company and the project exceptionally well leading into 2021.”
Euroz Hartleys Limited and Canaccord Genuity (Australia) Limited (Canaccord) are joint lead managers to the placement.
Use of funds
Proceeds from the placement will be applied towards:
- Completion of front-end engineering design (FEED) optimisation program at the company’s 100%-owned Lake Wells Sulphate of Potash Project;
- Minor works associated with the finalisation of the offtake program, syndicated debt facility (including NAIF), EPC contracting and EPA approvals process;
- Minor pre-development activities; and
- General working capital purposes.