EXT 0.00% $8.56 extract resources ltd

rio continue to invest in era

  1. 585 Posts.
    I see this morning that ERA have announced a CR for $500M, with RIO fully supportive to provide their portion being $342M (68.4%)

    Clearly RIO are in uranium for the long haul, I just wonder how much cash they have set aside for Husab?

    Copy of the ANN from Etrade below (not yet on the ERA website for some reason). There is also a 52 page presentation on the CR on the Etrade site, presume these are also available on ASX and shortly on the ERA website.

    NB Mods - not cross promoting - this goes to the Husab picture.

    Wednesday, 12 October 2011
    ERA TO RAISE $500 MILLION IN EQUITY VIA AN ACCELERATED
    RENOUNCEABLE ENTITLEMENT OFFER


    • 12 for 7 underwritten accelerated renounceable entitlement offer to raise $500
    million
    • Offer Price of $1.53 per share, a 29.8% discount to the Theoretical Ex-Rights
    Price
    • Proceeds to be used to fund construction of Ranger 3 Deeps exploration
    decline, further studies into development of Ranger 3 Deeps mine, expanded
    exploration of the Ranger Project Area and construction of the Brine
    Concentrator and other water management initiatives
    • Major shareholder Rio Tinto is fully supportive of the capital raising
    Following the announcement in August 2011 that Energy Resources of Australia Ltd
    (‘ERA’) was well advanced in developing a long term funding plan, ERA today
    announced a 12 for 7 accelerated renounceable entitlement offer of new ERA ordinary
    shares (‘New Shares’) to all eligible shareholders at an offer price of $1.53 per New
    Share (‘Offer Price’) to raise approximately $500 million (‘Entitlement Offer’). The
    Entitlement Offer comprises an institutional component (‘Institutional Entitlement
    Offer’) and a retail component (‘Retail Entitlement Offer’).
    Rio Tinto, ERA’s largest shareholder, is fully supportive of the Entitlement Offer. It
    has committed to subscribe for its 68.4% entitlement in full, and the remainder of the
    Entitlement Offer is fully underwritten. In addition, Rio Tinto has indicated that it
    intends to participate in sub-underwriting of any shortfall in the Retail Entitlement
    Offer.
    The proceeds of the Entitlement Offer will be used to fund:
    (a) the construction of a Brine Concentrator for an estimated cost of $220 million
    and other water management initiatives for an estimated cost of $52 million;
    (b) the construction of the Ranger 3 Deeps exploration decline and associated
    exploration drilling for an estimated cost of $120 million;
    (c) the completion of evaluation studies into the development of the Ranger 3
    Deeps mine for an estimated cost of $55 million; and
    (d) an expanded exploration program targeting highly prospective areas on the
    Ranger Project Area during the period 2012 to 2014 for an estimated cost of
    $40 million.
    Details of the Entitlement Offer and other information described in this announcement
    are also set out in an investor presentation which ERA has provided to the ASX today
    (‘Investor Presentation’). The Investor Presentation contains important information,
    including key risks and foreign selling restrictions with respect to the Entitlement Offer.
    2
    ERA’s Chief Executive, Rob Atkinson said “This capital raising will provide funding for
    the three very important projects for ERA.”
    “ERA takes water management very seriously. This capital allows ERA to progress
    the implementation of our water management strategy, which includes the
    construction of a Brine Concentrator and other initiatives, in as timely a manner as
    possible.”
    “It is important that ERA understands the full extent of the resources on the Ranger
    Project Area and, as such, has planned to conduct an expanded exploration program
    to be conducted over the period from 2012 to 2014.”
    “Following the Northern Territory Government’s recent approval, site preparation work
    for the Ranger 3 Deeps exploration decline will begin shortly, with construction of the
    box cut and decline scheduled to commence in May 2012. In parallel, ERA will
    undertake evaluation studies on the potential development of the Ranger 3 Deeps
    mine.”
    “ERA expects to make a decision on the Ranger 3 Deeps mine development in 2014.
    At the same time, ERA will reassess its future funding requirements having regard to
    the outcome of the Ranger 3 Deeps evaluation studies, the detailed rehabilitation
    studies presently being undertaken and the operating and market conditions
    experienced in the period to 2014.”
    Overview of Entitlement Offer
    Eligible shareholders with a registered address in Australia and New Zealand will be
    invited to subscribe for 12 New Shares for every 7 existing ERA ordinary shares held
    at 7.00pm (AEDT1) on Monday, 17 October 2011 (‘Record Date’) at the Offer Price
    (‘Entitlement’).
    The Offer Price of $1.53 per New Share represents a 29.8% discount to the
    Theoretical Ex-Rights Price (‘TERP’).
    New Shares issued under the Entitlement Offer will rank equally with existing shares.
    New Shares representing the renounced Entitlements and the Entitlements of
    ineligible shareholders will be offered to eligible institutional shareholders and other
    institutional investors, with any proceeds in excess of the Offer Price (‘Retail
    Premium’) returned pro-rata to such renouncing or ineligible shareholders.


 
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