Walkabout will also raise a further $1 million through a subsequent rights issue to shareholders, of which $512,000 will be underwritten by diversified emerging mining company Sigur.
It’s a strategic win-win for both parties, as the funds will allow Walkabout to complete its 2014/15 work program, while Sigur is looking to use its network of African professionals to develop and grow a new southern African coal company into the opportunities being created through the impending “coal cliff” being forecast by the South African electricity agency Eskom.
Sigur Minerals is a subsidiary of Sigur Holdings, an international holding company that plans to use development opportunities in emerging African economies.
The strategy of Sigur, chaired by Melbourne-based 30-year industry veteran Trevor Shard, is to identify high quality, overlooked mineral assets with growth potential on a large scale, to develop them and start production and generate returns from the same while positioning it at the forefront of the industry in establishing an environmentally friendly mining house.
It has extensive government and industry networks across the southern African business community.
Walkabout will convene an extraordinary general meeting for shareholders to approve the placement, immediately after which time the junior will undertake a 1 for 5 rights Issue to shareholders which will be partially underwritten by Sigur on the same terms as the placement.
The 1 for 5 rights issue will be held at the same price as the placement, $0.005c to raise approximately $1 million before costs. Sigur has indicated that it will exercise all its rights in terms of the rights Issue and has also agreed to underwrite the issue to a further amount of $512,000.
Walkabout managing director Allan Mulligan said the investment and new relationship comes at exactly the right time for Walkabout and its Takatokwane thermal coal project in Botswana.
“We envisage the combined team maintaining the focus on developing the project and also, through leveraging on the extensive network contacts of Sigur, seeking out new opportunities within the South African junior coal sector and in delivering thermal coal to Eskom,” Mulligan said.
Walkabout will seek shareholder approval for the issue of 198,000,000 shares at an issue price of $0.005 per share to Sigur to raise $990,000, representing a percentage holding after the placement of 19.86%.
Sigur will advance $150,000 to the company prior to the EGM as an interest free loan which will convert to shares and form part of the share subscription.
In the event that shareholders don’t approve the deal, the loan will be repayable to the investor within 30 days of the date of termination.
Sigur Holdings is vice chaired by Tiny Diswai-Moremi, who is also currently the deputy CEO of the Public Enterprises Evaluation and Privatisation Agency in Botswana and is responsible for advising various government ministries and assisting them in implementing their privatisation and outsourcing initiatives.
She also holds a position with Glenrand MIB (Botswana) and chairs of the board of trustees of the Millennium Umbrella Pension Fund, and chairs the Board of Trustees of the Glenrand Orphans Fund.
Sigur Capital is a global investment banking firm that provides insight and expertise to lenders, investors, companies and government entities.
