Perseus Mining Inks An Underwriting Agreement For The Exercise Of $45 Million Warrants

Perseus Mining Inks An Underwriting Agreement For The Exercise Of $45 Million Warrants

On Monday, Perseus Mining Limited announced that it has executed A$45 million underwriting agreement for warrants. The news sent the stock price to decline by 6.186% in a mid-day trade as at 15 April 2019 (1:51 PM AEST).

In the announcement to Australian Securities Exchange, Perseus Mining Limited (ASX: PRU) stated that it has entered into an underwriting agreement with Hartleys Limited and Canaccord Genuity Limited to jointly underwrite the exercise of 102,538,227 Perseus warrants exercisable at A$0.44 each, expiring on 19 April 2019. This takes the total amount of underwritten warrants to circa A$45 million.

The agreement is for remaining number of warrants that were issued in April 2016 but have not been exercised by holders yet. It includes the issuance of 143,050,770 warrants by Perseus to the shareholders of Amara Mining plc exercisable at $0.44 per warrant at any time within a period of three years. Since April 2016, about 40.5 million warrants have either been in the process or have already been exercised by warrant holders.

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Perseus’s Chief Executive Officer and Managing Director, Mr Jeff Quartermaine stated that the proceeds from the warrant underwriting would strengthen the company’s financial position as it embarks on the next phase of growth with the development of its third gold mine, Yaouré Gold Mine in Côte d’Ivoire, as well as further exploration activities and other growth initiatives.

Under the terms of the agreement, Canaccord and Hartleys have guaranteed to exercise any part of the outstanding 102,538,227 warrants that remain pending for exercise by the existing owner of the warrant prior to its expiry, i.e., 19 April 2019. In return, the underwriters will jointly be entitled to receive an underwriting fee of 2.7% and a management and selling fee of 0.67%, as a percentage of Gross Amount, with such fees being divided equally between Hartleys and Canaccord.

Mr Jeff Quartermaine added that the company has witnessed a substantial demand from investors to sub-underwrite the exercise of the warrants in relation to this underwriting arrangement. This demonstrates the significant support of investors to Perseus’ strategic plan to produce more than 500k ounces of gold annually at an all in-site cost of below US$850 per ounce from 2022.

Perseus is backed by the robust balance sheet with recently announced US$150 million corporate debt facility as well as the current and future cash flows.  As per the company’s information, the shares to be issued in settlement of this underwriting agreement is anticipated by 30 April 2019.

PRU stock price has witnessed a marginal improvement of 1.04% over the past 12 months, including the positive price change of 16.87% in the past three months and 40.58% in the last six months. The market capitalisation of the company stands at $505.92 million as at 15 April 2019 on the Australian Securities Exchange.

Also Read : Perseus Yaoure Mine Exploration Permit exceeds the Deadline


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