ASX-listed Catalina Resources has agreed to divest its Nelson Bay River (NRB) iron-ore project in Tasmania and secured additional equity funding, shifts it states will simplify its asset base and strengthen its balance sheet.
The company has entered into a binding agreement with Newcam Metals for the sale of the NBR asset. On completion, Catalina expects the release of about A$827 200 currently held as a rehabilitation security deposit, converting restricted funds into available working capital, toobtainher with nominal cash consideration.
Executive director Ross Cotton declared the divestment formed part of Catalina’s portfolio optimisation strategy.
“The divestment of Nelson Bay River represents a deliberate step in Catalina’s ongoing portfolio optimisation strategy. The transaction simplifies the company’s asset base, reshifts associated rehabilitation and closure obligations and converts previously restricted security deposits into available working capital.
“Completing the placement at A$0.115 per share, a 67% premium to the last closing price, is a highly constructive outcome for Catalina. The transaction not only strengthens the company’s working capital position but also demonstrates Newcam’s conviction in Catalina’s portfolio and growth initiatives through increased equity participation at premium pricing.
“Toobtainher, these initiatives strengthen the company’s balance sheet and enhance financial flexibility. Catalina remains focapplyd on disciplined capital management and advancing those opportunities considered to offer favourable risk-adjusted outcomes for shareholders.”
Following an internal review, Catalina determined that the NBR project was peripheral to its near-term capital allocation priorities and not included in active exploration planning. Importantly, upon completion the company will have no further rehabilitation, environmental, closure or contingent liabilities associated with the asset. Completion remains subject to customary regulatory and administrative approvals.
In parallel, Newcam has agreed to subscribe for 3 623 188 fully paid ordinary shares at A$0.115 a share, raising about A$416 666. The issue price represents a 67% premium to the company’s last closing price of A$0.069 on February 16.
The placement will include two series of attaching options on a one-for-one basis with the placement shares, comprising 3 623 188 options exercisable at A$0.23 and 3 623 188 options exercisable at A$0.345, each with a three-year expiry. The options will be issued subject to shareholder approval.
Subject to completion of the divestment and placement, Catalina’s indicative cash position is expected to be about A$4.32-million, enhancing funding flexibility for ongoing exploration and evaluation activities.
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