Wedoany.com Report on Feb 25th, ASX-listed Catalina Resources recently announced that it has agreed to sell its Nelson Bay River iron ore project in Tasmania and completed a premium equity placement. The company stated that these measures aim to simplify its asset base and strengthen its balance sheet to support future development.
Catalina has entered into a binding agreement with Newcam Metals to divest the Nelson Bay River asset. Upon completion of the transaction, the company will release approximately A$827,200 in rehabilitation bonds, converting restricted funds into available working capital, and will receive a nominal cash consideration. Executive Director Ross Cotton noted that this asset divestment is a key step in Catalina's portfolio optimization strategy.
Ross Cotton stated: "The sale of Nelson Bay River is a deliberate step in Catalina's ongoing portfolio optimization. This move simplifies the company's asset structure, removes rehabilitation and closure obligations, and converts restricted bonds into available funds."
"The completion of the placement at A$0.115 per share, representing a 67% premium to the last closing price, is a positive outcome for Catalina. This transaction not only improves the working capital position but also demonstrates confidence in Catalina's portfolio and growth plans through Newcam's premium participation in the equity."
"These actions collectively strengthen the company's balance sheet and enhance financial flexibility. Catalina will continue to focus on prudent capital management and advance opportunities that can deliver favorable risk-adjusted returns for shareholders."
Following an internal review, Catalina determined that the NBR project was a lower priority for near-term capital allocation and was not included in its active exploration program. Upon completion of the transaction, the company will no longer bear any rehabilitation, environmental, closure, or contingent liabilities related to the asset. The transaction remains subject to customary regulatory and administrative approvals.
Concurrently, Newcam has agreed to subscribe for 3,623,188 ordinary shares at A$0.115 per share, raising approximately A$416,666. The issue price represents a 67% premium to the company's closing price of A$0.069 on February 16. The placement also includes two series of attaching options, issued on a one-for-one basis with the shares, comprising 3,623,188 options with an exercise price of A$0.23 and the same number with an exercise price of A$0.345, valid for three years and subject to shareholder approval.
Upon completion of the asset divestment and equity placement, Catalina's indicative cash position is expected to be approximately A$4.32 million, which will enhance the company's funding flexibility for exploration and evaluation activities, supporting its portfolio optimization and capital structure strengthening.
