Forrestania Resources Ltd. has raised AU$310 million through a two-tranche institutional placement, funding its acquisition of the Edna May Gold Hub from Ramelius Resources.
Under the terms of the placement, Forrestania will issue 775 million new fully paid ordinary shares at 40 cents per share.
The company will issue 237.2 million shares in the first tranche to raise AU$94.9 million. It will issue the remaining 537.8 million shares in the second tranche to raise AU$215.1 million.
Capitalising on the overwhelming investor demand, Forrestania has exercised its contractual rights to alter the transaction terms with Ramelius.
The company has increased the upfront cash component of the acquisition to AU$210 million while reducing the value of the Forrestania script to be issued to Ramelius to AU$90 million.
The remaining capital will fund the refurbishment and development of both the newly acquired Edna May infrastructure and the company’s existing Lake Johnston processing facility, where refurbishment works are already well underway.
Forrestania Chairman David Geraghty described the transaction as a defining milestone in Forrestania’s strategy to construct a gold production business of significant scale in Western Australia.
“The Edna May acquisition provides a second production hub for the company within trucking distance of a substantial portion of Forrestania’s global gold resource inventory,” Geraghty said.
“With the refurbishment of the Lake Johnston processing facility well underway, the Edna May acquisition provides a second production hub for the Company within trucking distance of a substantial portion of Forrestania’s global gold resource inventory.”
The shares for tranche one will be settled on July 7, while shares under the second tranche will be settled in late August.
The acquisition is set to be completed in September.
