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  • Silver Lake Resources Raising Up To $63.7 Million 0 comments
    Aug 27, 2013 2:28 AM

    Silver Lake Resources (ASX: SLR) is raising up to $63.7 million including a heavy oversubscribed fully underwritten $47.5 million placement to repay debt and for working capital requirements.

    Notably, the placement of shares priced at $0.85 each represented a 7.6% discount to the 10 day volume weighted average price and a 2.2% premium to the 30 day VWAP of the company's shares on the ASX.

    Up to $15 million will be raised through a Share Purchase Plan while another $1.2 million will come from a placement of shares to the company's directors.

    "We are delighted by the strong support received for the Placement from a large number of existing and new Australian, Asian, North American and European investors which ultimately resulted in a heavily over-subscribed Placement," managing director Les Davis said.

    "Net proceeds raised from the Placement, the SPP and the placement to directors will be used to repay our outstanding debt facilities and provide working capital for our operations.

    "The strong support we have had from existing and new investors coupled with the participation by Silver Lake directors in this capital raising highlights the positive sentiment towards the future prospects of the company."

    Operations

    Silver Lake had recorded production of 55,600 ounce of gold for the quarter ending 30 June 2013, contributing to a 83% increase in fully-year production to 151,296 ounces.

    Production in the 2014 financial year is expected to range from 180,000 to 200,000 ounce of gold.

    In addition to its producing Mount Monger and Murchison projects, the company holds a number of low cost, low risk and short dated expansion and organic growth options.

    Capital Raising

    The oversubscribed placement of 55.9 million shares to institutional and other sophisticated and professional investors in Australia and other jurisdictions, was fully underwritten by RBC Capital Markets.

    Settlement of the Placement is currently scheduled to take place on 30 August 2013 with anticipated allotment and quotation of the new Shares to occur on the ASX on 2 September 2013

    Along with the Share Purchase Plan to existing shareholders with shares priced at $0.85 each to raise up to $15 million, the company will also seek shareholder approval to place $1.2 million worth of shares to the company's directors at the same issue price as the placement and SPP.

    Analysis

    The heavily oversubscribed placement raising $47.5 million is a strong show of confidence in Silver Lake Resources' production profile and in the current gold price environment and volatile markets.

    The participation by Silver Lake directors in the offering, subject to shareholder approval, is an endorsement of the future prospects of the company.

    Post the offering Silver Lake will have a strengthened balance sheet which will provide it with financial and operational flexibility moving forward.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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