Issue of Shares and Options Completed 10 December 2010
Marion Energy Limited (Marion or the Company) (ASX Code: MAE) wishes to advise that it has issued 434,138,431 fully paid ordinary shares (Shares) and 173,655,372 ASX listed options to acquire Shares (Options) following the passing of the resolutions put to Marion shareholders at the general meeting of the Company held on 10 November 2010.
As a consequence of the issue of the Shares and Options referred to above, the Company now has on issue 863,960,474 Shares and 248,860,389 Listed and Unlisted Options. Please refer to the accompanying Appendix 3B.
Convertible Notes
As previously announced:
? the Company's banker PF Energy Investments B.V. (a subsidiary of ABN Amro Bank) has the right to convert US$5 million of the facility principal currently outstanding into a convertible note by 28 February 2011, with a 6% coupon and a maturity date of 30 September 2013 (the PF Energy Convertible Note). The PF Energy Convertible Note may be convertible into Shares at the discretion of PF Energy at the volume weighted average price of Shares traded on ASX over the 5 whole days preceding conversion (5 Day VWAP);
? under the terms of the amended credit facility with PF Energy two additional tranches of US$5 million each of the principal amount outstanding may be converted into convertible notes at the discretion of PF Energy at the 5 day VWAP, subject to the Company making repayments of the same amounts in reduction of the principal amount outstanding (the PF Energy Additional Tranches)
? the Company has secured a A$6 million commitment from Tick-Tack-Toe Pty Ltd (TTT) by way of a convertible note (the TTT Convertible Note). Details of the terms of the TTT Convertible Note, including the 5 Day VWAP conversion rate, are set out in the Company's ASX release dated 24 September 2010.
At present, the TTT Convertible Note is drawn to A$250,000 and the PF Energy Convertible Note will, upon issue as part of the overall refinancing, be fully drawn to US$5 million. The Company has not presently committed to draw down any further amounts under the TTT Convertible Note, and so far as the Company is aware, PF Energy does not presently intend to convert any outstanding amounts under the PF Energy Convertible Note into Shares or to convert any of the principal into the PF Energy Additional Tranches.
However, the effects on the Company's capital structure in the event that the TTT Convertible Note and / or the PF Energy Convertible Note (including the PF Energy Additional Tranches) are fully drawn and converted to equity (at various indicative prices) is described in the tables below. NOTE: these examples are for illustrative purposes only.
View the pdf document for Figures 1, 2 and 3.
Use of funds
By virtue of the issue of Shares and Options, the refinancing of the Bank Facility (including the PF Energy Convertible Note) and the TTT Convertible Note, as at the date of this announcement, Marion has cash reserves of approximately $8m. Marion currently intends to apply these funds in the following manner:
? $6m is expected to be applied to the Company's Clear Creek Project work program over the next 12 months; and
? $2m is expected to be required for general corporate purposes over the next 12 months.
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