Nautilus Minerals Inc. has entered into an agreement with Numis Securities Limited in which Numis has agreed to underwrite the equity capital offering as reported in Stockwatch Dec. 22, 2006, under which the company will raise gross proceeds of $100-million (U.S.) (equal to 51 million pounds sterling or $118-million (Canadian)) through the issue of 27,438,606 common shares, including 5,499,109 common shares to Epion Holdings Limited, at a price of 185 pence (equal to $4.29 (Canadian)) per share. In conjunction with the placing, the company is seeking admission to trading of all of its issued common shares on AIM, a market operated by the London Stock Exchange PLC.
David Heydon, president of the company, commented: “This is the next piece in our business plan, since our IPO only nine months ago, to develop a low-cost base metal mine based on sea floor massive sulphide copper-zinc-gold silver deposits. This financing from institutional investors complements the $99.6-million (U.S.) financings late last year by Anglo American, Teck Cominco and Epion.”
The net proceeds of the placing, when taken alongside its existing cash resources of approximately $111-million (U.S.) and other sources of capital, are expected, subject to timely permitting, to be sufficient to finance the company into production at its primary project, Solwara 1, in the territorial waters of Papua New Guinea. The finances are planned to be deployed by the company in the detailed design and construction of subsea mining equipment, including two mechanical miners, power umbilicals, pumps, a 1,800-metre riser pipe and related handling equipment, as well as subject to permitting, the construction of an onshore concentrator plant and the acquisition of the necessary land on which to build the plant and port.
The placing is conditional on admission and the approval of the TSX Venture Exchange. It is expected that the approval of the TSX Venture Exchange will be received prior to admission and that admission will become effective and dealings will commence in the common shares of the company on AIM on Feb. 2, 2007. The placing may be terminated in certain circumstances, including adverse business, financial and political conditions.
Numis is a leading U.K. independent, investment banking and broking group. In addition to acting as the underwriting agent in connection with the placing, Numis will act as the company’s nominated adviser and broker upon admission.
Numis will receive on closing a 5-per-cent cash commission of the gross proceeds of the placing (excluding the gross proceeds resulting from the common shares acquired by Epion) and broker warrants entitling it to purchase a total of 549,395 common shares at a price of 231 pence (equal to $5.37 (Canadian)) at any time within 24 months after closing. Out of this commission, Numis will pay a 4-per-cent cash commission to Lodge Partners Pty. Ltd., an Australian corporate broker, in relation to 2,733,378 common shares placed with Lodge by Numis. M&A Advisors Limited will receive on closing a 10-per-cent cash commission on the gross proceeds resulting from the common shares acquired by Epion and broker warrants entitling it to purchase a total of 549,910 common shares at a price of $4.24 (U.S.) (equal to 215 pence or $4.99 (Canadian)), or such other price as may be approved by the TSX Venture Exchange, at any time within 24 months after closing.
In addition, certain shareholders and insiders of the company and their associates, including the company’s directors, executives of the company and Epion, have agreed that, upon admission, they will not sell any common shares either owned by them or acquired by them on or after the date of admission for a period of 12 months following admission. Furthermore, David Heydon, Janis Heydon and Russell Debney have entered into a separate agreement with Numis in which Numis has agreed, in light of the fully subscribed placing, to underwrite the sale of 908,117 common shares of the company owned by them at the same price per common share as the new shares.
Exchange rates used herein: $1.00 (U.S.) is equal to 0.51 pound sterling or $1.18 (Canadian) and 1.00 pound sterling is equal to $2.32 (Canadian).
