LionGold

LionGold: Co to issue US$30m of convertible bonds at 9.0% due 2015 with DMG to handle the issue on a best efforts basis. The conversion right attached can be exercised anytime 30 calendar days after the issue date till maturity. The conversion price is the higher of
1) $0.964 (the 10% disc to VWAP on prev mkt day)
2) 120% of the VWAP of 20 trading days after the issue date
and will be limited to $1.158 per conversion share (approx 9.2% higher than last close of $1.06).

The number of new shares convertible is dependant on the conversion price and will range approx from 4.46% to 5.36% of existing share capital.

The issue also raises gearing (net debt/equity) to 128.5%.

Co has a NAV per share of 6.14c before the issue. The issue will increase NAV to 10.55-10.64c.

Note that this follows a private placement of 12m shares at $1.057 to 2 individuals. The convertible bond issue appears to be relatively attractive with conversion price capped at 9.2% premium to last done with a 9% yield compare to its share price.