Nickel producer Western Areas has completed a previously announced share placement to raise A$50m funds for debt reduction and growth initiatives at its Forrestania deposits in Australia.
The fully underwritten ordinary share placement was announced on 4 December 2012 by the company's board.
Shares of Western Areas was issued at a price of A$3.80 ($4) a share, with the placement price representing a 5.9% discount to the five day volume weighted average price of $4.04 a share for the period ending 4 December 2012.
Western Areas managing director Dan Lougher commented that the placement has received the support of both existing and new investors.
"The strong demand for the placement demonstrates the market's ongoing commitment to Western Areas, its growth plans and capital management strategy," Lougher said.
Lougher was further quoted by The West Australian as saying that the capital raising strengthens the company's balance sheet and reinforces plans for growth in 2013.
"Our interest costs will be reduced and with a new ANZ facility, we have access to immediate and substantial at-call capital for growth," added Lougher.
The company employed the services of UBS Australia as sole lead manager, underwriter and bookrunner to the placement.
Additionally, Western Areas will undertake a share purchase plan, wherein each eligible Western Areas shareholder can invest up to a maximum of A$15,000 ($15,697).
Issue price under share purchase plan is similar to the placement price.
The company's flagship Forrestania project, comprising the Flying Fox and Spotted Quoll mines and the Cosmic Boy Concentrator, is projected to generate 25,000 tonnes of nickel concentrate per annum on average.
Image: Forrestania contains significant prospects for further nickel discoveris. Photo: Western Areas NL.