Highlights
- Fully underwritten pro rata non-renounceable entitlement offer on the basis of three (3) New Shares for every eleven (11) Shares held by Eligible Shareholders on the Record Date at A$0.003 per New Share to raise approximately A$2.038 million.
- Participants in the Offer will receive one (1) free attaching quoted option (ASX: CZLOB) for every (3) New Shares subscribed for and issued, exercisable at A$0.006 on or before 1 June 2023.
- Major shareholder, Copulos Group has committed to apply for its full entitlement (approximately 31%) under the Offer – a strong show of support from the Company’s largest shareholder.
- The funds raised will enable the Company to refurbish the company’s wholly owned concentrator located on-site at the Plomosas Mine and commence zinc and lead concentrate production from its own processing facilities.
- The commencement of zinc and lead concentrate production from the Company’s concentrator will be from a flowsheet designed for Plomosas ore and with greater plant availability than third party tolling concentrators.
Consolidated Zinc Limited (“Company“) (ASX:CZL) is pleased to announce that it intends to undertake a fully underwritten non-renounceable pro rata entitlement offer on the basis of three (3) new fully paid ordinary shares (“New Shares”) for every eleven (11) Shares held on 24 September 2020 (“Record Date”) at an issue price of A$0.003 per New Share to raise $2,038,291 (before costs), together with one (1) free attaching quoted option (ASX:CZLOB) for every three (3) New Shares subscribed for and issued, exercisable at A$0.006 on or before 1 June 2023 (“New Options”) (“Offer”). The Company expects to lodge a prospectus for the purpose of the Offer (“Offer Document”) with ASIC on or about Friday, 18 September 2020.
Brad Marwood, Managing Director of the Company said:
“This is a watershed moment for Consolidated Zinc, following the approval to commence a tailings storage facility at Plomosas in August 2020. The Company looks forward to refurbishing the existing concentrator at Plomosas which has always been the preferred development pathway for the Company, and which will be refurbished to a flowsheet that is designed for the Plomosas ore.
The Company expects that the consolidation of operations on-site at Plomosas will allow for the following benefits:
- improved preventative and planned maintenance, improving overall availability;
- grind size to maximise recoveries;
- optimised reagent blending and dosing to maximise recoveries; and
- abundant fresh water at Plomosas, allowing the concentrator to utilise fresh process water to maximise recoveries.
The Company looks forward to updating shareholders on progress.”
The Lead Manager and Underwriter to the Offer is Lazarus Corporate Finance Pty Ltd (“Lazarus“).
As well as Directors taking up their rights, the Company’s largest shareholder, the Copulos Group, which has a voting power of approximately 31%, has committed to apply for its full entitlement under the Offer. The Directors consider this a strong show of support from the Company’s largest shareholder.
The Company intends to use the funds raised from the Offer as follows:
| Item | Amount |
| Expenses of the Offer | $200,000 |
| Plomosas concentrator refurbishment | $1,838,291 |
| Total | $2,038,291 |
Note: The above table is a statement of the Board’s current intention as at the date of this announcement and the Board reserves the right to alter the way the funds are applied. The timetable for the Offer is as follows:
| Pro-rata Offer announced to ASX | 16 September 2020 |
| Offer Document lodged with ASIC | 18 September 2020 |
| New Shares and New Options quoted on an “ex” basis (date from which Shares commence trading without the entitlement to participate in the Offer). | 23 September 2020 |
| Record Date (date for identifying Shareholders entitled to participate in the Offer). | 24 September 2020 |
| Offer Document with Entitlement Form sent to Eligible Shareholders and Opening Date of the Offer | 29 September 2020 |
| Closing Date of the Offer (last date for lodgement of Entitlement & Acceptance Forms and Application Money) | 13 October 2020 |
| Quotation of New Shares and New Options commences on a deferred settlement basis | 14 October 2020 |
| Issue of New Shares and New Options | 21 October 2020 |
| Quotation of New Shares and New Options issued under the Offer | 22 October 2020 |
Note: Subject to the Listing Rules, the above dates may be changed without notice.
The Offer will be made to the Company’s shareholders with a registered address in Australia or New Zealand on the Record Date (“Eligible Shareholders“).
Assuming that no options or other convertible securities are exercised or converted before the Record Date, the effect of the Offer on the Company’s capital structure is shown in the following table:
| Shares | Amount |
| Existing Shares | 2,491,244,944 |
| New Shares issued under the Offer | 679,430,439 |
| Total Shares on issue after completion of the Offer | 3,170,675,383 |
| Options | Amount |
| Existing Options | 900,095,513 |
| New Options issued under the Offer | 226,476,813 |
| New Options issued to Lazarus (or its nominees) | 15,000,000 |
| Total Options on issue after completion of the Offer | 1,141,572,326 |
Shareholders may view all the Company’s ASX announcements, including those relating to the Offer, on the ASX’s website at www.asx.com.auor alternatively on the Company’s website at www.consolidatedzinc.com.au.
It is anticipated that the Offer Document will be mailed to Eligible Shareholders on or before 29 September 2020.
Application will be made to ASX for official quotation of the New Shares and New Options. Quotation of the New Options is subject to meeting the ASX criteria. No shareholder approval is required for the Offer.
Overseas Shareholders
The Offer is only made to Eligible Shareholders (i.e. shareholders with a registered address in Australia or New Zealand at the Record Date). Therefore, if you are a shareholder with a registered address other than Australia or New Zealand, no offer will be made to you. In making this decision, the Directors have taken into account the small number of overseas shareholders and the costs and administrative complexity of complying with applicable regulations in jurisdictions outside Australia and New Zealand.
Capital Raising Fees
As consideration for acting as Lead Manager and Underwriter to the Offer, Lazarus will be paid a management fee of 2% and an underwriting fee of 4% on the aggregate amount underwritten, $10,000 per month for three months and will be issued 15,000,000 New Options.
This announcement was authorised for issue to the ASX by the Directors of the Company. For further information please contact:
Brad Marwood
Managing Director
08 9322 3406
Original Article: https://www.consolidatedzinc.com.au/wp-content/uploads/2020/09/20200916-CZL-ENTITLEMENT-ISSUE-FINAL-ASX-LODGEMENT.pdf
