South Boulder Mines: North American investor support as Meridian Capital takes up all $9.5m placement
Monday, July 02, 2012 by John Phillips
South Boulder Mines' (ASX:STB) Colluli Potash Project has vast potential which has not been lost on international investors, with private equity group Meridian Capital International Fund to take all of the recently announced A$9.5 million placement, up from A$4.5 million originally.
The initial funds of A$4.5 million have been received from Meridian Capital, with the full settlement to take place by 5 July 2012 - which is almost two weeks earlier than previously announced.
The importance of the settlement is that it will allow South Boulder to focus on the next key elements of developing Colluli, including discussions with potential strategic investors.
Lorry Hughes, managing director of South Boulder, commented on the strong international investors support:
“Meridian is a well-regarded investor with a strong interest in potash. “We are delighted that they have decided to take all of this placement at what is a pivotal time for South Boulder as we embark on the next stage of the development strategy for Colluli.
“With this funding in place, we can focus on the next key planks of this project, including discussions with potential strategic investors, as part of our strategy to be in production no later than 2016.”
The placement is priced at A$0.95 to raise A$9.5 million, with each share having a one-for-two free listed option exercisable at A$1.50 within two years of issue.
On completion of the placement, Meridian and its associates will hold a 9.2% per cent stake in South Boulder, rising to 12.9% if it exercises all its options.
Colluli potash could have lower capital costs
In some more positive news for South Boulder, just last week the preliminary Definitive Feasibility Study pointed to the potential for lower capital costs.
All important CAPEX and operating costs could be reduced the study has revealed, becoming more attractive to financiers and paving the way for more rapid development and the start of production and cash flow.
Findings have also identified the benefits including processing of Carnallite as well as Sylvinite, which will result in reduced mining costs due to stripping ratios being less than those used in the Engineering Scoping Study.
Another major plus to move the project forward is that strong technical support is emerging for an expansion of potash production capacity beyond the planned start-up capacity of 1Mtpa - due to the ability to process Carnallite mineralisation efficiently.
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Received on Mon Jul 02 2012 - 11:25:50 EDT