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Use of Proceeds for the Private Placement Transaction of Macquarie Bank Limited

In February 11, 2012 and February 20, 2012, Macquarie Bank Ltd., NiHAO Mineral Resources Inc., (the Company) and one of its major shareholders executed an Investment Agreement and its Amendment respectively. The Investment Agreement embodies Multi-Tranche Average Price Issuance Program ("Issuance Program") which would result in Macquarie Bank's subscription to newly-issued common shares of stock in the Company of up to an aggregate amount of One Hundred Fifty Million (150,000,000) shares on a private placement basis. The Issuance Program is a very good opportunity for the Company to raise its needed funds in collaboration with Macquarie Bank, a reputable and established financial institution. Amounts raised from this capital building program will equip the Company with adequate financial and logistical support to enable it to undertake full-scale operations and development in the mining sector, specifically in the commercial production of nickel ores in Dinapigue, Isabela.
Pursuant to the Investment Agreement, Macquarie Bank agreed to subscribe to shares of stock in  NiHAO Mineral Resources Inc. of up to an aggregate amount of One Hundred Fifty Million (150,000,000) shares from the Company's authorized but unissued capital stock. The shares shall be purchased in tranches, consisting of ten (10) individual trading days selected by Macquarie as its subscriber days occurring within a sixty (60) consecutive calendar day  period. The shares shall be subscribed in tranches in an amount equivalent to ninety percent (90%) of the Volume Weighted Average Price (VWAP) of the Shares for the subscriber days during a Tranche Period.

The first tranche of the Issuance Program culminated on March 2, 2012 with Macquarie Bank's subscription to Thirty Three Million (33,000,000) common shares at the subscription price of Nine Pesos and Forty Six Centavos (Php9.46), for a total amount of Three Hundred Twelve Million One Hundred Eighty Thousand Pesos (Php312,180,000.00).

On March 5, 2012,  NiHAO Mineral Resources Inc. executed a General Contracting Agreement (Contracting Agreement) with Geogen Corporation, Geogen holds the rights over a mineral property consisting of an aggregate 2,391.4081 hectares located at Dinapigue, Isabela (the "Mineral Property") and covered by Mineral Production Sharing Agreement ("MPSA") No. 258-2007-II dated July 30, 2007. Under the Agreement, the Company agreed to perform mining services to Geogen for the development of the Mineral Property, including among others, mining, extraction, piling, stowing, and trimming of nickel ore, hauling services, barging, wharfage, arrastre and stevedoring services, as well as environmental maintenance services (the "Contracting Services"). For and in consideration of the Services to be performed by the Company pursuant to the Agreement, Geogen shall pay the Company an amount equivalent to ninety percent (90%) of the invoice value of the nickel ore sold by Geogen to third parties less amounts due to AGP Industrial Corporation's (AGP) by way of management fees pursuant to the Management Agreement with Option to Buy executed between Geogen and AGP on October 14, 2011. Portions of the funds raised under private placement transaction will fund the following projected expenses to be incurred for the Contracting Services to be rendered by the Company to Geogen, to witt:
  • Offer Expenses including, among others, the following:
    • Gross expenses related to Proceeds
    • Documentary Stamp Tax
    • Listing Application Fee
    • Other Miscellaneous Expenses
  • Exploration Works including, among others, the following:
    • Drilling Works
    • Report Preparation
    • PMRC Compliance
    • JORC Compliance
  • Project Development including, among others, the following:
    • Port Project Studies
    • Permitting
    • Port Project Development
    • Road and Environmental Structures
  • Working Capital including, among others, the following:
    • General Expenses
    • Administrative Expenses
    • Professional Fees
Apart from the funding requirements for the Dinapigue, Isabela Project, total proceeds derived from the private placement transactions with Macquarie Bank will also be used, by way of capital and working expenses, to finance the following:
  • Internal operating costs to include, among others, the following:
    • General Expenses
    • Administrative expenses
    • Professional fees
    • Permitting fees and compliance expenses
    • Other costs incidental to operations
  • Expansion of investments and business interests and expenses incidental thereto
  • Business mergers and acquisitions, either through the Company or its subsidiaries, or its joint venture partner, Glencore International PLC, of other business interests and expenses incidental thereto.
 

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"Use of Proceeds for the Private Placement Transaction of Macquarie Bank Limited" was written by under the Business category. It has been read 1353 times and generated 0 comments. The article was created on and updated on 13 April 2012.
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