Shaw River sells shares to fund operations

Written by David Adetona

Shaw River Resources has launched a $25 million share placement to raise funds for the development of its manganese assets in Australia, Namibia and Ghana.
The Australian based company said it would issue 125 million shares at 20 cents per share to sophisticated and institutional clients of Hartleys Limited and its major shareholder, Atlas Iron.
“Proceeds will cater for next month’s extensive infill drilling programme and a feasibility study on the company’s Otjozondu Manganese project with a view to bring the project into manganese production in 2012. Proceeds will also be directed at additional drilling and scoping studies on Shaw River’s Baramine and Ghana manganese projects,” the company said in a statement.
Vincent Algar, managing director of Shaw River, said the proceeds would enable the company to accelerate the development of the Otjozondu Manganese project, as well as enable the company to commence the generation of a strong cash flow from mid-2012 onwards.
He added that the company is delighted by the strong international support received for the placement, which will see the introduction of a number of the world’s largest and most well respected institutional investors onto the Shaw River register because of the confidence demonstrated by the current shareholders of the company.
“The strength of interest in the placement ensures Shaw River remains a well funded manganese development company that continues to execute its strategy of building a global manganese business.
Feasibility studies are underway at the Otjozondu Project and drilling will commence in early May this year. In Australia, drilling will commence at the Baramine manganese project later this month,” Algar said.
Shaw River’s largest shareholder, Atlas Iron Limited, is participating in the placement and Hartleys Limited is broker to the offer.
The placement will be completed in two tranches with the first tranche of up to 48.7 million shares to be issued pursuant to the company’s 15% capacity under ASX Listing Rule 7.1 and the second tranche of up to 76.3 million shares to be issued subject to shareholder approval at the company’s general meeting currently scheduled for Tuesday, 17 May this year