Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

March 25, 2010 21:25 ET

Western Areas Announces Pricing for an Issue of A$125 Million of Convertible Bonds

PERTH, AUSTRALIA--(Marketwire - March 25, 2010) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Western Areas NL ("Western Areas" or "The Company") (TSX:WSA)(ASX:WSA) is pleased to announce the pricing of an issue of A$125 million of convertible bonds ("Convertible Bonds") due 2015. The Joint Lead Managers and Bookrunners were UBS AG, Australia Branch ("UBS"), and Macquarie Capital Advisers ("Macquarie").

The Convertible Bonds are to be issued at a premium of approximately 28% to the last price of Western Areas shares prior to the launch of A$5.18 per share and carry a coupon of 6.4%. The high premium reflects investor's validation of the Company's high quality assets and nickel production profile.

The Offer was significantly oversubscribed, with strong demand from investors in all major capital markets including the United Kingdom, Europe, and Asia Pacific.

Western Areas' Managing Director, Mr Julian Hanna, said "The issue of these convertible bonds forms part of a well considered growth strategy for the Company. This transaction will enable Western Areas to pay down all its bank debt and provide the Company with balance sheet flexibility to enable it to advance its exploration and mine development initiatives".

Use of Proceeds

The net proceeds of the issue of the Convertible Bonds are expected to amount to approximately A$120 million.

Specifically, proceeds will be applied to the following:

  • Fully repay and cancel the A$45 million BHP Billiton Facility which was provided as part of the offtake agreement;
  • Repay A$60 million that has been drawn from the ANZ Facility. The facility remains in place until 31 March 2012;
  • Complete the feasibility study at the high grade Spotted Quoll underground mine where an initial Ore Reserve of 70,200 tonnes contained nickel was announced on 19th March 2010; and 
  • Fund further drilling of advanced targets at Western Areas' highly prospective 100% owned Forrestania Project and at other joint venture interests in Western Australia.

The effect of repayment of the BHP Billiton and ANZ Facilities will be to extend the maturity of some of the Company's existing loan debt profile until 2015, at a lower average interest rate.

Summary Terms

The Convertible Bonds are direct, unconditional, unsubordinated and unsecured obligations of Western Areas which rank pari passu with the existing convertible bonds. The new Convertible Bonds carry a coupon of 6.40% per annum and are convertible into Western Areas shares at an initial conversion price of A$6.61 per share (subject to standard adjustments).

The conversion right of the Convertible Bond can be exercised by the holder any time after 41 days from completion. Unless previously redeemed or converted, the Convertible Bonds will be redeemed at par on 2 July 2015. Western Areas has the further right to redeem all outstanding Convertible Bonds at their principal amount on or after 23 July 2013 if the Western Area share price exceeds for a specified time 130% of the conversion price. Application has been made for a listing of the Convertible Bonds on the Singapore Exchange Securities Trading Limited and settlement is expected to occur on or around 8 April 2010.

FORWARD LOOKING STATEMENT: This release contains certain forward-looking statements. Examples of forward-looking statements used in this release include: "This transaction will enable Western Areas to pay down all its bank debt and provide the Company with balance sheet flexibility to enable it to further advance its exploration and mine development initiatives".

These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements.

This announcement does not include reference to all available information on the Company or the Forrestania Nickel Project and should not be used in isolation as a basis to invest in Western Areas. Any potential investors should refer to Western Area's other public releases and statutory reports and consult their professional advisers before considering investing in the Company.

For Purposes of Clause 3.4 (e) in Canadian instrument 43-101, the Company warrants that Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

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