International mining investor Hawke’s Point has entered into a $17.5 million agreement with Eastern Goldfields Limited (ASX:EGS) which will see Hawke’s bnecome become a cornerstone investor.
Hawke’s Point has agreed to subscribe for 87,500,000 shares in ESG at a price of $0.20 per Share for an aggregate subscription amount of $17.5 million.
Under the agreement with Hawke’s Point, Eastern Goldfields must also procure additional subscribers for an aggregate subscription amount of $12.5 million. The company says it has received expressions of interest from existing shareholders.
The combined placements will provide up to $30 million to support ongoing activities in Eastern Goldfields’s Western Australian mining assets, Eastern Goldfields, which is led by highly regarded mining investor Michael Fotios, will now seek firm commitments by close of business on November 10, 2017 to raise the additional $12.5 million.
The Placement will be completed via two tranches
Following completion of Tranche 1 and Tranche 2 of the Placement (assuming the Placement is fully subscribed) Hawke’s Point will own approximately 12.2% of the issued share capital in the company and, for as long as Hawke’s Point (and/or its associates) holds at least 10% of the issued share capital of the company.
Hawke’s Point is an affiliate of an international diversified alternative asset management business and provides financing solutions to companies in the mining and resources sector across a range of instruments, structures and geographies.
Mr Fotios, the Eastern Goldfields Executive Chairman, said funds raised under the Placement will be used for additional exploration, ongoing resource development and feasibility studies on the company’s Mt Ida/ Menzies projects, as well as providing general working capital.
“I am very pleased to welcome international mining investor Hawke’s Point as a significant shareholder,” Mr Fotios said.
“I am also pleased to receive considerable ongoing support from our existing shareholder base. The funds raised will be used to support Eastern Goldfields’ ongoing operations at Davyhurst and further progress exploration activities. This new investment is a strong endorsement of the quality of the assets and our overall strategy.”
Jett Capital Advisors LLC has acted as exclusive placement agent in connection with the Placement and Squire Patton Boggs has acted as the company’s legal advisor.