Almonty Completes Woulfe Acquisition, Announces $7.78 Million Financing

Almonty initiated its first round of financing through multiple sources for a combined total gross proceeds of $7.78 million.

Money involved in 3D Printer Companies

Those interested in the tungsten space were undoubtedly excited to hear that Almonty Industries (TSXV:AII) has now completed the acquisition of Woulfe Mining (CSE:WOF) and acquired all of its outstanding shares. And while the completion of this deal is exciting in itself, the financing news that came along with it was also something worth mentioning.

Specifically, Almonty announced that it will complete a non-brokered private placement of a secured convertible debenture in the principal amount of $4 million, a non-brokered private placement of 2.1 million common shares at a price of $0.080 per share for aggregate gross proceeds of $1.68 million and complete an unsecured bridge financing of $2.1 million for a combined total gross proceeds of $7.78 million.

The secured convertible debenture will be issued to an existing shareholder of Almonty, Deutsche Rohstoff AG and will mature on the date two years after the closing of the offer. It will bear an interest rate of 5 percent per annum. The outstanding principal amount is convertible into common shares of Almonty at the option of the holder, at a conversion price of $0.81 per share. What’s more, if Almonty raises a minimum of $22.5 million in equity capital pursuant to a subsequent offering, the company may convert the outstanding principal amount into common shares.

As for the bridge loan, that will mature on the earlier of either a date two years after the closing or the date that Almonty completes a subsequent equity offering within 12 months of the closing of the arrangement that results in gross proceeds of at least $11 million. The bridge loan bears an interest rate of 12 percent per annum which is payable on maturity.

Considering the current state of the markets, securing any type of financing can be difficult, and using multiple sources made sense to Almonty.

“In these capital markets its important to explore all avenues open to the company where the company can continual protect their shareholders value,” Almonty CEO Lewis Black told the Investing News Network. “This is first round of financing and we were happy that multiple sources were open to us and continue to be so.” When asked whether or not he thought investors were becoming bullish on tungsten, Black said that Almonty’s shareholder have always believed strongly in what the company has been doing.

“They recognize that through growth and critical mass comes strength and that the current market offers a unique opportunity to acquire our targets at valuations that will appreciate dramatically as we develop them and the global demand returns. Tungsten is a declining resource, but with consistent 3 percent per annum demand growth, our investors outlook is extremely positive for our sectors future,” Black said.

Woulfe acquisition complete

Of course, the long-awaited Woulfe acquisition has now been completed and now Almonty can move forward with its plans for the Sangdong project. In July, Black said that that he felt that Almonty had enough money to see the Sangdong project to a successful conclusion and the new financing further cements that.

In regards to the $7.78 million, Black said that “part of it will be used for satisfying a third party lenders note that we inherited from the previous management and the balance to continue the preparation for the build of Sangdong.”

Moving forward, Almonty will be analyzing the current bankable feasibility study in depth and expect to make dramatic improvements given the company’s tungsten operational knowledge. “On site we will begin cleaning UG access ramps and begin the detailed engineering study once the EPC contractor has been selected,” Black added.

As mentioned, the Woulfe acquisition has been a long time coming, but that won’t deter Almonty from looking at other M&A opportunities in the future.

“We still feel there are further opportunities for growth through acquisition and consolidation. Given the current state of the pricing we will look, if we feel a project is viable, to add to our portfolio of non-Chinese geopolitically safe, economically viable and Chinese unit cost competitive projects.”

 

Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article. 

Related reading:

Almonty’s Woulfe Acquisition to Create the ‘Leading Tungsten Producer Outside of China’

Almonty Finally Gets a Piece of Woulfe Mining — What’s Next?

Woulfe and Almonty Abandon Plan to Merge

Get the Latest Tungsten Investing Stock Information

Get the latest information about companies associated with Tungsten Investing delivered directly to your inbox.

Tungsten

By selecting company or companies above, you are giving consent to receive email from those companies. And remember you can unsubscribe at any time.

Comments

Leave a Reply