WMN bags cornerstone investor
Graphite player Western Mining Network (ASX: WMN) has declared that it should be producing operating revenue within a year after securing a $6 million funding deal which will allow it to build a mini-plant in Indonesia.
It completed a placement to UK-based Lanstead Capital LP, issuing 30 million shares at 20c per share, a 25% premium to WMN’s last trading price. Following the deal, Lanstead will hold 16.68% of WMN’s share capital.
Lanstead has also picked up 7.5 million options at 27c each, exercisable on or before 30 June in 2017.
However, a flexible sharing agreement could net WMN a lot more should its share price hit 27c or above in the next 18 months.
While WMN will grab $900,000 immediately, it will take the rest of the $6 million in monthly installments from Lanstead.
The monthly payments and issue will be based on a benchmark price of 27c per share.
Should the WMN share price finish above 27c in any given month, WMN will receive more cash than is due.
Should it fall below 27c, it will get less.
The $6 million figure is based on the benchmark price of 27c.
WMN told investors that there is no upper limit on the additional amounts it would receive from Lanstead should the WMN share price go up, and it wouldn’t issue any new shares to Lanstead should the price drop below 27c.
CEO David Putnam told the market that the deal is a signal to the market on its growth strategy, and the additional funding would allow it to get to revenue quicker.
“Most important of all this investment provides the capital required to execute critical operating initiatives and should ideally see us produce our first revenue within the coming year,” Putnam said.
In any case, the cash from the deal will be used to sort out a scoping study and the construction of WMN’s first pilot plant as part of its graphite project in Indonesia.
The game plan
Earlier this month WMN unveiled its plan in Indonesia to build two mini-plants capable it producing five tonnes of graphite per day at it Kalimantan and Sulawesi projects.
The plants will reportedly be capable of producing varying degrees of graphite, with low grades going for less than $US1000 ($A1408.04) to $10,000.
The lower grade graphite will simply require more conventional beneficiation techniques such as crushing, milling, agitation, and floatation.
The higher-end processing is planned to be farmed out to its partners, including South Korea-based Carbon Nano Tech.
However, to get the ball rolling WMN wants to build two mini plants based at the two projects.
WMN CEO David Putnam has been working since he was appointed in July this year to tie up funding for the next stage of the WMN plan.
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