Hawsons Iron targets $10m capital injection

Hawsons Iron is looking to execute a $10 million equity drawdown under the terms of its $200 million put option agreement with LDA Capital.

The funds will cover the costs of Hawsons Iron’s Starlight Investment Company buyout, which saw the company purchase the full stake in the Hawsons Iron project.

Hawsons managing director Bryan Granzien said the final pricing and amount raised would be determined in accordance with the terms and conditions of the LDA Capital agreement in the coming weeks.

“Our target amount is $10 million, but market volatility will be important during the pricing period over the next 30 trading days in determining final pricing and quantum,” he said.

The facility was designed to ensure Hawsons Iron had access to a reliable source of capital, protecting itself from the short-term shifts and irregularity of the equity market.

“Our planning late last year as equity and debt markets were peaking has paid off, because we are now able to work with our US-based strategic financial partner and use their capital to keep advancing the Hawsons Iron project,” Granzien said.

“We don’t want anything to slow us down as we ramp up towards completion of our BFS (bankable feasibility study), and then move into development and construction.

“Most importantly, having access to LDA Capital’s $200 million facility gives us a significant advantage, particularly during such extremely challenging equity market conditions.”

Hawsons intends to put up to 25 million shares to LDA Capital.

Under the terms of the facility, Hawsons may, subject to certain conditions, issue call notices to LDA Capital to subscribe for fully paid ordinary shares in Hawsons.

This would be up to a maximum of 10 times the company’s average daily number of shares traded on the ASX during the 15 trading days before the call notice is made.

The issue price of the shares will be calculated as the higher of 90 per cent of the 30-day volume-weighted average price (VWAP) after the issue of the call notice, and the “minimum acceptable price” notified by Hawsons to LDA Capital, in each case subject to adjustments for various factors.

Under the terms of the facility, LDA Capital must subscribe for a minimum of 50 per cent and a maximum of 200 per cent of the shares put to LDA Capital.