July 25, 2008

Iluka Resources to sells AUD 248 million in shares to fund mine

Perth based Iluka Resources the world's biggest zircon producer announced that it has issued AUD 248 million new shares to institutions to fund the development of the Jacinth Ambrosia project in South Australia's Eucla Basin. The offer price of AUD 2.55 was at a significant discount of 30% from the last closing price.

The stock emerged from a four day trading halt, with volatile trading signifying investor confusion about this move. Shares in ILU traded in a range between AUD 3.27 and AUD 3.94, to close at AUD 3.86, up 5.4%. Iluka said the share placement was 3.5 times oversubscribed.

Iluka Resources also said it plans to sell a further USD 105 million new shares to retail investors, with the terms of the retail offer the same as those of the institutional offer. That will mean eligible retail shareholders will be entitled to subscribe for 4 new shares for each 7 Iluka shares held at the record date at the offer price of AUD 2.55 per new share.

Iluka is a major participant in the global mineral sands sector and is involved in the sales and marketing of titanium based products and zircon.