Perseus Mining Limited (ASX:PRU) (TSE:PRU) (FRA:P4Q) (OTCMKTS:PMNXF) has entered into an underwriting agreement for the exercise of warrants with a total value of approximately $45 million
The joint agreement with Canaccord Genuity (Australia) Limited and Hartleys Limited involves more than 102.5 million Perseus warrants which expire on April 19, 2019, and are exercisable at 44 cents each.
Perseus’ managing director and CEO Jeff Quartermaine said: “The proceeds from the warrant underwriting add to Perseus’s financial capacity as the company embarks on the next phase of growth involving amongst other things, the development of our third mine, Yaouré.”
In April 2016, Perseus issued more than 143 million warrants exercisable at 44 cents per warrant at any time within three years to the shareholders of Amara Mining plc as part consideration for their shares in that company.
Since then, about 40.5 million warrants have been or are being exercised by holders.
Acting as joint lead managers Canaccord and Hartleys guarantee the exercise of any of the outstanding warrants not exercised by warrant owners before their expiry.
The total amount that could potentially be raised from the exercise of the underwritten warrants is approximately $45 million, before expenses.
Canaccord and Hartleys have received significant demand from large international and domestic institutional investors, including several Perseus shareholders, to sub-underwrite the exercise of the warrants.
Quartermaine added: “The significant demand from investors to sub-underwrite the warrant exercise, demonstrates the strong support for the company’s strategic plan to produce over 500,000 ounces of gold per year at an all-in site cost of less than US$850 per ounce from 2022.”
Funding from the warrants strengthens Perseus’ balance sheet.
Together with the recently announced US$150 million corporate debt facility, existing cash and future cash flows, this ensures Perseus is well funded.
Funds will position the company to fund the development of its third gold mine, the Yaouré Gold Mine in Côte d’Ivoire, as well as further exploration activities and other growth initiatives.