Hastings Successfully Completes Share Placement and Launches Rights Issue
Placement and Rights Issue to Raise $28.5 Million
Sydney, April 3, 2019 AEST (ABN Newswire) - Hastings Technology Metals Ltd (Hastings or Company) (
ASX:HAS) is pleased to advise that it has successfully completed a placement of A$12 million after costs to shareholders and investors both in Australia and overseas. The placement shares will be issued at a price of A$0.17 cents per share and will also be issued with a free Option to subscribe on the basis of 1 free Option for every 2 Placement shares. Existing shareholders have strongly supported the placement in view of the on going progress made by the Company in developing its Yangibana project, a high grade neodymium (Nd) and praseodymium (Pr) rare earth mine under construction in the Gascoyne region of Western Australia.
In addition, the Company has today launched a non-renounceable rights issue on the basis of 1 new ordinary share for every 8 ordinary shares held (Rights Issue) at a price of A$0.17 cents per ordinary share to raise approximately A$16.5m.
- A$12 million raised from share placement at A$0.17 per share exceeded the original target of A$10m.
- Rights issue to raise up to approximately A$16,500,000.
- Funds raised from placement and rights issue will be used for ongoing construction of the 380 room accommodation village, early infrastructure earth works on the mine site and progress payments for long lead time equipment currently on order.
Share Placement
The placement shares priced at A$0.17 cents per share represent a discount of 12.8% to the 5 day VWAP of A$0.1946 cents and 15% discount to last Friday's closing price of A$0.20 cents. For every 2 (two) placement shares subscribed the holder will be entitled to 1 (one) free attaching Option on the basis of 1 Option for every 2 Placement shares. The Option Exercise Price is A$0.25 cents and has an Expiry date of 12 April 2022. The call option value using the Black Scholes option pricing model is A$0.062 cents assuming a 64% volatility (based on last 12 months of trading) and a RBA cash rate of 1.5%. The Company intends to apply to ASX for the listing of the Options and will lodge a prospectus with ASIC and ASX in relation to the Options. All securities issued under the placement will be issued in accordance ASX listing rule 7.1.
It is expected that the Placement shares will be allotted by 12 April 2019 and the attaching Options will be allotted 7 days following the lodgement of the prospectus.
Rights Issue
The 1 (one) for 8 (eight) Rights Issue is on a non-renounceable basis. Eligible shareholders are being offered the opportunity to subscribe for 1 New Share for every 8 existing Hastings shares held as at the Record Date (5:00pm Perth time on 8 April 2019), to raise up to (approximately) A$16.5 million. Eligible Shareholders who take up their entitlement in full may also apply to subscribe for additional shares in excess of their entitlement. Assuming full take up of the Rights Issue, the Company will issue 97,259,460 new ordinary shares (New Shares).
The Rights Issue will be partially underwritten (to A$1 million) by Hastings' Executive Chairman, Mr Charles Lew.
An offer booklet will be sent to eligible shareholders on or before 11 May 2019.
Use of funds
The funds raised as part of this capital raising exercise will be used to continue construction of the 380 room accommodation village, early infrastructure earth works on the mine site and progress payments for long lead time equipment currently on order, namely the rotary kiln and off-gas scrubber with the remainder used as working capital.
Following this placement, the company has exhausted its LR 7.1 and has remaining approximately [20.7 million] shares spare capacity under LR7.1A. Accordingly, a notice of meeting is to be mailed to shareholders shortly which outlines resolutions to refresh the Company's placement capacity and to seek shareholder approval to refresh the Company's placement capacity and to permit participation of the Directors in this capital raising.
Charles Lew said "the success of this placement shows the growing attention of investors in permanent magnets and the role they play in the e-mobility revolution as well as in clean and renewable energy space. The funds raised will enable us to continue with the pace of development at Yangibana with the target of coming into production in 1H 2021".
About Hastings Technology Metals Ltd
Hastings Technology Metals Ltd (ASX:HAS) (FRA:5AM) is advancing its Yangibana Rare Earths Project in the Upper Gascoyne Region of Western Australia towards production. The proposed beneficiation and hydro metallurgy processing plant will treat rare earths deposits, predominantly monazite, hosting high neodymium and praseodymium contents to produce a mixed rare earths carbonate that will be further refined into individual rare earth oxides at processing plants overseas.
Neodymium and praseodymium are vital components in the manufacture of permanent magnets which is used in a wide and expanding range of advanced and high-tech products including electric vehicles, wind turbines, robotics, medical applications and others. Hastings aims to become the next significant producer of neodymium and praseodymium outside of China.
Hastings holds 100% interest in the most significant deposits within the overall project, and 70% interest in additional deposits that will be developed at a later date, all held under Mining Leases. Numerous prospects have been identified warranting detailed exploration to further extend the life of the project.
Brockman Project
The Brockman deposit, near Halls Creek in Western Australia, contains JORC Indicated and Inferred Mineral Resources, estimated using the guidelines of JORC Code (2012 Edition).
The Company is also progressing a Mining Lease application over the Brockman Rare Earths and Rare Metals Project.
Hastings aims to capitalise on the strong demand for critical rare earths created by the expanding demand for new technology products.
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