Lucapa Diamond Company Limited (ASX: LOM) (“Lucapa” or “the Company”) is pleased to announce the Company has received firm commitments from professional and sophisticated investors to subscribe for 181,818,182 fully paid new ordinary shares in the Company at an issue price of $0.055 per share to raise $10 million before costs (“the Placement”).
The Placement involved the issue of 54,824,075 free attaching unlisted $0.08 options, expiring 2 years from the date of issue (“Options”).
• Oversubscribed placement of new shares to raise $10 million cornerstoned by strategic investors
• Proceeds primarily for expansion in the processing capacity of the Mothae kimberlite mine from 1.1Mtpa to 1.6Mtpa (+45%)
The oversubscribed capital raising, was cornerstoned by Ilwella Pty Ltd, a diversified investment vehicle of the Flannery family office and by Safdico International, a leading multinational diamond company and subsidiary of Graff International. The Company also welcomed new institutional investors to the register.
The issue price represents a discount of approximately 10% to the volume weighted average price (“VWAP”) of Lucapa shares during the previous 5-day trading period.
The Company intends to issue 92,904,127 new fully paid ordinary shares under the Company’s existing ASX Listing Rule 7.1 capacity and 64,104,642 new fully paid ordinary shares under the Company’s 7.1A capacity (comprising tranche 1 of the Placement), with 24,809,413 new fully paid ordinary shares and 54,824,075 Options being issued following shareholder approval at a general meeting to be convened in December 2020 (comprising tranche 2 of the Placement).
The 24,809,413 new fully paid ordinary shares, to be issued subject to shareholder approval at the general meeting to be convened as above, are intended to be issued to Safdico International.
Far East Capital Limited and Prenzler Group Pty Ltd acted as co-lead managers to the Placement. For their part in cornerstoning the Placement, Ilwella Pty Ltd will receive 2,712,727 new fully paid ordinary shares and 10,754,545 Options.
Lucapa intends to use the funds from the Placement to commission an expansion in the processing capacity of the Mothae kimberlite mine from 1.1Mtpa to 1.6Mtpa (+45%). This should materially increase production, revenues and due to economies of scale, improve unit operating costs and deliver improvements to earnings. The investment in Mothae is expected to cost $8.5 million, with the balance of the funds raised, net of costs, to be utilised for general working capital purposes.
Managing director Stephen Wetherall commented, “We are extremely pleased with the strong support shown by strategic and institutional investors in the value accretive expansion plan formulated by Lucapa and the Government of the Kingdom of Lesotho, our Mothae partner”. “The Mothae expansion should see a material increase in the benefits derived by the Basotho nation and to our shareholders”.
An overview of the expansion plans and the full news was released to ASX and can be viewed at https://www.lucapa.com.au/announcements.
Authorised by the Lucapa Board.
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