Odey funds to be a big participant in Tri-Star Resources fundraising

Tri-Star proposed a conditional placing to raise £13m by the issue of ordinary shares at a price of 43p each on Friday, by way of an accelerated bookbuilding process.

The AIM-traded company said funds under the discretionary management of Odey Asset Management had committed to invest up to £13m in the placing at the issue price.

Under the terms of the commitment, the firm said it agreed with Odey that the final allocation to the Odey funds, which would be determined at the end of the bookbuild, would not be less than £10.5m.

The bookbuild was expected to close at 1400 BST on 25 June, but the company also reserved the right to close the bookbuild earlier or later, without further notice.

It said most of the net proceeds from the placing would be used to meet Tri-Star’s share of additional shareholder investment in Strategic & Precious Metal Processing, an Omani company in which Tri-Star held a 40% equity interest, and which was constructing an antimony and gold processing facility in the Sohar Freezone of the Sultanate of Oman.

The balance of the net proceeds would be applied to pay down part of the secured loan notes held by certain of the Odey Funds, and for general working capital purposes, the board explained.

“We are delighted to continue to support Tri-Star and SPMP in this final fundraising before the SPMP Project goes into production,” said Odey Asset Management founding partner Crispin Odey.

“Our calculations indicate that, based on the price of this investment in Tri-Star through the placing, we are investing in SPMP at an implied post-fundraising enterprise value of approximately $200m, or a post-fundraising equity value of $100m, which we view as a very attractive level.

“We look forward to further news as the plant goes through commissioning and starts to produce its first antimony and gold products.”