Mid-tier Fenix Resources has increased its stake in exploration company Athena Resources, becoming the company’s largest shareholder.
Mid-tier Fenix Resources has increased its stake in exploration company Athena Resources, becoming the company’s largest shareholder.
Following the conversion of 53 convertible notes – which equates into 265 million shares – iron ore-focused Fenix will secure a 19.84 per cent stake in Athena.
However, given the John Welborn-chaired company has committed to fully underwrite a $2.6 million renounceable entitlement offer announced by the junior on Monday, this stake could increase to 46.56 per cent.
The offer is open to Athena shareholders on a pro-rata basis, with one new share issued per every two fully paid ordinary shares held.
“Fenix has entered into an underwriting agreement with Athena whereby Fenix will fully underwrite the offer such that any entitlements not taken up by existing shareholders, or other eligible applicants under the offer, will be subscribed for by Fenix pursuant to the underwriting agreement,” the company said.
Athena told the market that the offer’s issue price of $0.004 per new share represented a 33.3 per cent premium of the company’s final closing price of $0.003 prior to entering into a trading halt on November 29.
The junior said proceeds from the placement would be allocated towards a series of key initiatives – including updates to scoping study of its flagship Byro Magnetite project in the mid-west, investigating additional opportunities with the green steel sector along with costs required to hire a new chief executive.
“Fenix believes Athena represents a unique regional opportunity to develop a small-scale ultra high-grade magnetite iron ore producer which would demand a premium price as well as being ideal for any green steel initiatives,” Mr Welborn said.
“The work to date indicates the Byro magnetite project matches with Fenix’s skillset in low capital project development and regional logistics capabilities.
“Fenix is pleased to take up a significant shareholding in Athena and to support the current capital raise which will provide funding to enable the Byro magnetite project to be advanced.”
Late last month, mid-tier Fenix announced its hedge book had been extended through to June next year, following the acquisition of several contracts.
The new contracts, scheduled between January and June, totalled 120,000 tonnes of iron ore at an average of $152 per tonne.
Fenix shares were down 3 per cent to 28.5 cents, while Athena was up 33.3 per cent to $0.004 cents.
