Xanadu arranges A$10.2-million financing for Kharmagtai Project, Mongolia

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Xanadu Mines Ltd. [XAM-TSX, ASX; XANAF-OTC] has received firm commitments for a placement to eligible professional and sophisticated investors of approximately 163.8 million fully paid ordinary shares in Xanadu at an issue price of 6.2 cents each to raise approximately $10.2-million (before costs). All dollar amounts are in Australian dollars unless otherwise indicated.

Highlights include firm commitments received for a placement to raise approximately $10.2-million (before costs) that are well supported by both domestic and international institutions. Xanadu is in a strong financial position to deliver a Kharmagtai exploration strategy, targeting resource growth and definition of high-grade bornite-rich zones at depth.

Concurrent with the placement, there are firm commitments from certain institutional investors have been received to facilitate a $1.4-million sell-down with an existing shareholder. Key shareholder SSI Asset Management AG maintains its existing pro rata shareholding.

The proceeds of the placement, together with the company’s existing cash resources, will be applied toward the Phase 2 exploration program at the 100%-owned Kharmagtai copper-gold project located 420 km southeast of Ulaanbaatar, Mongolia. The plan is to target higher-grade, bornite-rich zones at depth and for general working capital purposes.

The issue price of 6.2 cents per new share represents a 15.1% discount to Xanadu’s last close (April 20, 2021) of 7.3 cents per share, a discount of 13.2% to the five-day volume-weighted average price of 7.1 cents per share; and a discount of 14.1% to the 30-day VWAP of 7.2 cents per share.

New shares under the placement will be issued pursuant to the company’s existing placement capacity under Australian Stock Exchange Listing Rule 7.1 and will rank pari passu with the existing fully paid ordinary shares currently on issue.

In conjunction with the placement, Xanadu and the joint lead managers have entered into a binding commitment letter with an existing shareholder to offer all of its shares for sale (sell-down shares) contemporaneously with the offer of shares under the placement, at the offer price, totalling approximately $1.4-million. The joint lead managers have received commitments from certain institutional investors to purchase the sell-down shares.

The placement is scheduled to settle on Friday, April 30, 2021, with allotment and trading to occur on Monday, May 3, 2021. The sell-down is scheduled to settle on or around May 6, 2021.

Argonaut Securities Pty. Ltd. and CLSA Australia Pty. Ltd. acted as joint lead managers to the placement.


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