Hot Rock to raise US$3.1m in placement for Chile/ Peru projects
Australian geothermal developer Hot Rock is launching a capital raising for US$3.1m to fund costs of exploration for its Chile and Peru projects.
Reported already earlier this month from Australia, “Hot Rock (ASX: HRL) will make a AU$3.2 million (US$3.1m) capital raising via a placement and fully underwritten rights issue to fund costs relating to exploration of the company’s South American projects.
The placement is to institutional and sophisticated investors who have committed to subscribe for 13,867,500 shares at 6 cents each to raise approximately $830,000 before issue costs.
The non-renounceable rights issue to eligible shareholders, on the basis of 2 new fully paid ordinary share for every 5 shares held, at an issue price of 5.5 cents per share, to raise approximately $2.34 million before costs.
It will also finance ongoing exploration and appraisal testing programs aimed at progressing the “proof of concept” program at the Koroit Project and determining geothermal resources in the company’s Victorian permits and other corporate and offer costs as well as working capital requirements.
Mark Elliott, executive chairman, said “the company has made excellent progress advancing our projects in Australia, Chile and Peru. We have secured some of the best geothermal projects within each of these highly prospective regions. Funds from the capital raising will be predominately used for exploration at the company’s projects in Chile and Peru.”
Exploration programs including mapping, sampling and magneto-telluric (MT) surveys, which will assist in outlining geothermal reservoirs for drill testing have been planned.
Hot Rock anticipates that the placement shares will be allotted on 10 November 2010.
The Rights Issue will be available to all registered shareholders who hold shares on 16 November 2010. Shares issued under the placement will be entitled to participate in the rights issue.
The Placement was managed by Bizzell Capital Partners Pty Ltd, an entity associated with Stephen Bizzell, a director of Hot Rock. The Rights Issue is fully underwritten by Bizzell Capital Partners.
Hot Rock has provided Bizzell Capital Partners with the right, but not the obligation, to place up to a further 18.2 million shares at 5.5 cents each per share after the close of the rights issue, subject to obtaining any necessary shareholder approvals. This placement, if completed, will raise an additional $1 million.”
Source: Proactive Investors