| Mon 15 Nov 2010, 12:00 | | WGR - Witwatersrand Consolidated Gold Resources Limited - Wits Gold raises |
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WGR
WGR
WGR - Witwatersrand Consolidated Gold Resources Limited - Wits Gold raises
capital through a general issue of shares for cash
Witwatersrand Consolidated Gold Resources Limited
(Incorporated in the Republic of South Africa)
Registration Number 2002/031365/06
JSE Code: WGR ISIN: ZAE000079703
TSX Code: WGR CUSIP S98297104
("Wits Gold" or "the Company")
WITS GOLD RAISES CAPITAL THROUGH A GENERAL ISSUE OF SHARES FOR CASH
Introduction
Wits Gold is pleased to announce that in cooperation with its adviser
Renaissance Capital, the Company has raised gross proceeds of R120 050
303(US$17.5 million) through the issue of 2 223 155 ordinary shares at a price
of 5400 cents per share. The new shares represent approximately 7.0% of Wits
Gold`s issued ordinary share capital prior to the capital raising, whilst the
issue price of 5400 cents corresponds to a 7% discount to Wits Gold`s 30-day
volume weighted average price on 5 November 2010. These conditions are in
accordance with an ordinary resolution passed at the annual general meeting of
the Company held on 10 September 2010 which authorised the directors of the
Company to issue shares for cash in accordance with the JSE Limited Listings
Requirements.
Rationale
This capital raising follows the announcement by Wits Gold on 7 September 2010
that the Company had entered into two transactions with Harmony Gold Mining
Company in the southern Free State. The proceeds of the issue for cash is
intended to be used primarily to fund the Company`s acquisition and planned
exploration activities in the shallow De Bron-Merriespruit South area ("the DBM
Project"). Accordingly, the Company has mobilised five drill rigs and is
actively investigating the possibility of exploiting this ground using new or
existing infrastructure. The funds raised will enable the company to undertake
drilling, followed by resource definition, scoping and appropriate environmental
and feasibility studies. Subject to the success of this programme, it is the
Company`s intention to valorise this project, possibly by bringing in a
strategic mining partner to assist in its development.
Commenting on the capital raising, Marc Watchorn, Chief Executive Officer of
Wits Gold, said: "We are delighted with the positive response of institutional
shareholders which reflects a vote of confidence in the potential of the DBM
area. The recent transactions with Harmony have enabled the Company to
consolidate a strategic block of potentially shallow resources that were
previously separated by a farm boundary. Wits Gold believes that this shallow
DBM Project merits further evaluation as it contains up to four discrete reef
horizons at depths of 500-1200 metres. The Company`s new focus on the moving
towards the development of its assets was well received by the institutional
investors that the Company met during its recent roadshow."
Financial effects
The unaudited pro forma financial effects of the transaction, for which the
directors are solely responsible, are provided for illustrative purposes only,
to show the effect of the transactions on losses and net asset value per share
as if the transactions had taken place on 1 March 2009, for the purpose of the
unaudited pro forma statement of comprehensive income effect, and 28 February
2010 for the purpose of the unaudited pro forma statement of financial position.
Because of their nature the unaudited pro forma financial effects may not give a
true reflection of the Company`s financial position and performance. The
unaudited pro forma financial effects have been compiled from the audited
financial statements as at and for the year ended 28 February 2010 and are
presented in a manner consistent with the format and accounting policies adopted
by the Company and have been adjusted as described in the notes hereto:
Audited Pro Pro
before forma forma
the After % After %
Notes transact The change The change
ion Option Issue
trans- of
action Shares
for
Cash
Basic & headline loss 1,3,4 (28.05) (24.22) 13.64 (22.66 19.23
per share (cents) )
Diluted basic & headline 1,3,4 (45.02) (38.91) 13.58 (36.40 19.16
loss per share (cents) )
Net asset value per 2,3,5 670.63 1 431.94 113.52 1 147.25
share (cents) 658.13
Net tangible asset value 305.31 263.91 565.38 85.18
per share (cents) 2,3,5 -13.56
Actual number of shares 2,3 27 891 32 267 15.69 34 490 23.66
in issue (000`s)
Weighted average number 2,3 27 716 32 092 15.79 34 315 23.81
of shares in issue
(000`s)
Diluted weighted average 2,3 27 841 32 217 15.72 34 440 23.70
number of shares in
issue (000`s)
Notes:
1 The "before" basic loss per share, diluted loss per share, headline loss
per share and diluted headline loss per share figures have been extracted
without adjustment from the published audited results for the year ended 28
February 2010.
2 The "before" net asset value and net tangible asset value per share have
been calculated from the financial information presented in the audited,
published results of Wits Gold for the year ended 28 February 2010.
3 The "Pro forma after the Option transaction" is derived from the pro forma
financial effects of the transactions previously disclosed in an
announcement released on 7 September 2010 and differs from the above due to
the then estimated number of shares to be issued as opposed to the actual
number of shares issued as depicted above.
4 The adjustments to the basic and headline loss per share and the diluted
basic and headline loss per share, are based on the weighted average number
of shares in issue at 28 February 2010, assuming that the transactions were
effective 1 March 2009. These adjustments reflect the effect of the
increase in the issued share capital resulting from the conclusion of the
Option transaction where 4 376 194 shares were issued, and the issue of 2
223 155 shares for cash. Due to the fact that the proceeds of the issue of
shares for cash will primarily be used to acquire an exploration property
and for exploration activities, no adjustment was made for interest earned,
and there are therefore no effects on the statement of comprehensive income
resulting from the transaction.
5 For net asset value and tangible net asset value calculations, it is
assumed that the transactions are effective 28 February 2010 and based on
the actual number of shares in issue at 28 February 2010. The adjustments
reflect the increase of R257 million in the value of the intangible assets
and the increase of 4 376 194 shares in the issued share capital from the
conclusion of the Option transaction and the net increase of R110 million
in cash resources after the issue of 2 223 155 shares for cash at R54 per
share and deducting total estimated costs of R10 million.
The placed shares are expected to be listed on the JSE on or about 15 November
2010, and will rank pari passu with the existing ordinary shares of the Company.
Johannesburg
15 November 2010
Sponsor:
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 15/11/2010 12:00:01 Produced by the JSE SENS Department.
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