Announcement PDF Interim Report for the Half Year Ended 30 June 2015 Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Contents Page Directors’ Report 3 Auditor’s Independence Declaration 14 Interim Financial Report Condensed consolidated income statement 15 Condensed consolidated statement of comprehensive income 16 Condensed consolidated statement of financial position 17 Condensed consolidated statement of changes in equity 18 Condensed consolidated statement of cash flows 19 Notes to the consolidated financial statements 20 Directors’ declaration 32 Independent Auditor’s Review Report to the Members 33 Note: All dollars in this report are Australian unless otherwise noted.  2. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report The Directors present their report on the consolidated entity consisting of Hillgrove Resources Limited (“Hillgrove” or the “Company”) and its controlled entities (the “Group” or the “Consolidated Entity”) for the six month period to 30 June 2015. Directors The directors of the Company during this period were:  The Hon. Dean Brown, AO.  Douglas Snedden (resigned 27 May 2015).  John Gooding.  Maurice Loomes.  Philip Baker.  Gregory Hall (resigned 26 May 2015).  Steven McClare (appointed 27 May 2015). Principal Activities Hillgrove is an Australian mining company listed on the Australian Securities Exchange (ASX: HGO) focused on copper production from its Kanmantoo Copper Mine in South Australia and developing value from its exploration tenements in Australia. Operating and Financial Review The Kanmantoo Copper Mine located in South Australia is an open-cut operation that as at the end of February 2013 hosted a Mineral Resource of 31.3 million tonnes (4.02Mt Measured, 22.27Mt Indicated, 5.00Mt Inferred) grading 0.78% copper and 0.20g/t gold (refer About Hillgrove at end of report). Following construction of the plant in late 2011, further capital enhancements and continuous improvements have increased plant throughput from a nominal 2.4 Mtpa to between 3.0Mtpa and 3.5Mtpa to produce approximately 90,000 dry metric tonnes of copper concentrate per annum, containing approximately 20,000tpa copper and associated gold and silver over the current life of mine. Sales of copper concentrate are made to Freepoint Metals and Concentrates LLC under a 100% copper concentrate offtake agreement. Hillgrove has exploration tenements adjacent to the Kanmantoo Copper Mine which are the subject of a current exploration program to extend the mine life. In addition, Hillgrove has two exploration projects in the Indonesian archipelago, Sumba Island, where low-sulphidation epithermal gold mineralisation within a series of large hydrothermal alteration systems has been identified, and Bird’s Head in West Papua where copper–gold mineralisation associated with an interpreted porphyry complex and associated extensive hydrothermal alteration system has been identified. Kanmantoo Copper Mine Kanmantoo Copper Mine in South Australia is located 55 kilometres from Adelaide which has simplified the provision of infrastructure. A main highway passes close to the project and being approximately 90 kilometres by road to Port Adelaide enables the trucking of copper concentrate to the port. The mine site is connected to the electricity grid and has mains water and licences available, although much of the process water is supplied by the District Council of Mount Barker’s treated waste water program. Hillgrove’s direct workforce is approximately 190 employees, along with some 60 specialised mining contractors for equipment supply and maintenance, blast hole drilling and explosives supply. The owner operated mining system implemented during 2013 has continued to operate effectively and safely during the half year. The combination of experienced Hillgrove employees and ongoing training of locally based employees, along with specialised contract skills, allows a high level of quality control in the critical areas of drilling, blasting and dilution control during mining operations. By the end of the half year to 30 June 2015, the 12 month Total Recordable Injury Frequency Rate (TRIFR) was 19.2 (31 July 2014: 13.0), a modest increase after the dramatic drop achieved following the move to owner operator in the prior year. Whilst the improvement is pleasing, there is considerable work underway to implement in full the integrated risk management system. 3. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) TOTAL RECORDABLE INJURY FREQUENCY RATE Operations – Mining At the beginning of the half year, 89% of future copper production was contained in the Giant Pit. The cut-back of the Giant Pit over the main orebody (originally Main pit and then a cut back called Kavanagh) continued to advance as a priority. During the high strip ratio of the cut back (high waste stripping for minimal ore), there was $10.2 million of pre-stripping undertaken in the half year and small sources of ore from satellite deposits were either stockpiled as transition/oxide or processed as primary ore. As the Giant Pit has progressed deeper through the weathered zones, the ore is now a primary sulphide that can be processed conventionally. At the beginning of the half year, the Emily Star Pit had reached primary ore and further cutbacks were being assessed. By half year end, mining had been completed in the Emily Star Pit, which reconciled positively for copper metal produced against the original Reserve estimate, albeit with lower grade and increased ore tonnes. Mining continued in the Nugent Pit until the early part of the half year with geotechnical stability, grade and tonnes all being below expectations. Once the pit reached the geotechnical domain dominant in the Giant Pit, “goodbye cuts” with high vertical walls were taken but this did not offset the significant earlier losses of metal. The pit was then readied for backfilling with waste from the Giant cutback. This backfilling provides a short haul option for the waste and increases productivity for the fleet in addition to the potential to extract further ore as backfilling progresses. Total material moved for the half year to 30 June 2015 was 10,935kt (31 July 2014: 10,003kt), and total ore mined was 2,039kt (31 July 2014: 2,197kt). * Due to move to 31 December year end, July was included again in the September quarter for comparison purposes. 4. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Operations – Processing The processing plant continued to outperform with record mill throughput, and was able to partially mitigate the impacts of lower grades. Recovery was below plan as a result of lower overall head grade, the treatment of tarnished older lower grade stockpiles, transitional ore and the initial controlled potential sulphidisation (CPS) plant trial. Mill throughput and reliability were maintained at a high level during the half year to 30 June 2015 with a total of 2,000kt primary and oxide ore processed at an average head grade of 0.53% copper (31 July 2014: 1,595kt processed at 0.78% copper head grade), with ongoing process control and improvements continuing to reduce milling costs per tonne of feed ore. With the substantially increased mill throughput, the quantity of ore processed is higher than plan and has allowed both low grade stockpiles and low grade mined to be processed. Whilst this lowers the headline grade processed and in some cases raises the C1 cost of production (if the historic attributable mining cost was high), it does allow processing at incremental rates and generates revenue. Recovery at Kanmantoo is sensitive to feed grade as there is a relatively consistent tail grade. Recovery has been maintained despite plant throughput rates in excess of 4.0Mtpa being achieved. These are excellent rates resulting from the many improvements made on a plant originally designed for 2.4Mtpa. Recovery for the half year to 30 June 2015 was 86% (31 July 2014: 92%), due to the mineralogy of the ore being processed, lower head grade, processing of transitional (oxidised) material and the initial CPS trial. The copper recovery in areas of primary sulphide remained consistently above 90%, as per historic results. Copper production for the half year to 30 June 2015 was 9,151t copper contained within concentrates (31 July 2014: 11,438t copper contained within concentrates). C1 costs for the half year to 30 June 2015 increased to US$2.12 per lb copper produced (A$2.71 per lb) which compares to the half year to 31 July 2014 US$2.03 per lb ($2.16 per lb). Whilst mining costs have stabilised and processing costs have continued to fall, the C1 cost was predominantly driven by the divisor of the copper volume produced, which was adversely affected by the lower head grade. The C1 cost expressed in US dollars has benefited from favourable movements in the foreign exchange rate. CPS Plant The $3.0 million capital project for the construction of the CPS plant undertaken in the latter half of 2014 and early 2015 was completed on time and on budget. The plant was successfully commissioned in May 2015. The new plant enables controlled conditioning and processing of oxide ore in a batch process and assists higher recovery and rates through the primary flotation circuit. Originally two seven day batch trials were planned during FY15, and then four months of full production batch processing of oxide ore from November 2015 to February 2016. The first seven day batch trial was completed during the period and the second trial has since been successfully completed. Rather than four months of full production, it is now likely the CPS parcels will be batched in discrete samples throughout the year as the concentrate has proven to be both saleable and suitable for shipping in a conventional manner. Offtake and Shipping Hillgrove has a 100% life of mine offtake agreement with Freepoint Metals and Concentrates LLC (“Freepoint”). Copper concentrate is trucked from the mine site to Port Adelaide, and is then sold on a CIF basis (cost, insurance, freight) to Freepoint. In the half year to 30 June 2015, four shipments totalling 42,434wmt of copper concentrate were shipped, all of which went to smelters in China. 5. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Environment and Community Kanmantoo management has continued to actively engage with local communities and landowners around the mine, along with key groups in the immediate regional centres. The Kanmantoo Callington Community Consultative Committee (KCCCC), being the local communities’ primary interaction with the mine, held two formal meetings during the half year, including a visit to the Kanmantoo Copper Mine by the dust working party. In addition to the planning and launch of a dedicated KCCCC website, key areas of discussion included: nuisance dust management, noise, traffic, and discussions regarding possible expansions to the north of the current Giant Pit and master planning for the local area. Along with the above meetings, Kanmantoo hosted or was involved in eight additional site visits and community functions during the period directly related to community engagement. Hillgrove approaches its community and social responsibilities seriously and believes the KCCCC (on which the Company is represented) is continuing to develop into a model of leading practice engagement to achieve mutual outcomes. The environment team continued its significant program of monitoring, reporting and permitting for the mine site. Rehabilitation of old farming/grazing land continued as part of the ongoing commitment to restore (off-set) native vegetation on the Mining Lease. An off-lease direct seeding program also commenced. This task involved removing 100mm of topsoil which contains an excess of nutrients and weeds. Native seeds generated by Kanmantoo’s own Seed Production Area (SPA) are then sown onto the subsoil. This rehabilitation is performed in strips so as not to expose too much area to weathering effects at one time. Along with this, significant plantings of native understorey vegetation were undertaken to assist regeneration in the significant northern woods on the lease. Refinancing of Debt Facilities On 25 May 2015 Hillgrove announced it had secured a Pre-Export Facility of US$14 million (plus a further US$6 million subject to conditions) with Ventures Australia LLC, a subsidiary of Freepoint Commodities LLC, and a deferral and extension of the existing price participation obligations with Freepoint Metals & Concentrates LLC (“Freepoint”). Freepoint have a long standing relationship with Hillgrove, providing early seed capital for the Kanmantoo project together with a life of mine Offtake Agreement. In addition, Macquarie Bank Limited has provided a $20 million Performance Bond Facility, primarily for the existing environmental and electrical infrastructure bonds. Both facilities have terms until 30 June 2018, with balances reducing from March 2016 for the Pre-export Facility and from March 2017 for the Bond Facility. Commodity Price Hedging Hillgrove has continued its active approach to hedging to support the revenue stream from falls in the copper price, providing strong support for Kanmantoo’s sales revenue and cash flows. Consistent with this strategy, favourable copper pricing and exchange rate conditions in April and May 2015 provided the opportunity to place additional hedging, with 6,500mt of copper hedging added at $7,917/mt ($3.59/lb) and 7,500mt added at $7,911/mt ($3.59/lb). This is an excellent outcome for Hillgrove with the pricing of the additional hedging placed in the top 18% (approximately) of Australian dollar copper prices experienced since late 2011. This program has now provided Hillgrove with 24,200mt of copper hedging at an average price of $7,738/mt ($3.51/lb). With this total hedging, Hillgrove has committed coverage for approximately 50% of payable copper out to December 2017, with high amounts in the next six months and smaller amounts in the tail, underpinning cash flow from operations during the second half of 2015 into 2016. In addition Hillgrove was able to complete 1,125 ounces of gold hedging at an average price of $1,556/ounce in order to further support the revenue stream to March 2016. 6. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Equity Raising In June 2015 Hillgrove successfully completed an equity raising of $10.08 million under a fully underwritten prorata non-renounceable rights issue of 40,310,719 new fully paid ordinary shares to its shareholders on a three for 11 basis, at a fixed price of $0.25 per share. Subscriptions under the offer totalled 20,052,600 new shares for an amount of $5.01 million, which represented approximately 50% of entitlements. The underwriters, Freepoint and Wilson HTM Corporate Finance Ltd subscribed for 70% and 30% respectively of the shortfall. Kanmantoo Mine Life Extension The first stage of mine life extension is being targeted through the optimisation of the 2013 Reserve Model, based on cost savings to date and planned initiatives. The reduction in mining cost, significant reduction in processing costs and targeted lower overhead/corporate costs have enabled potential mine life extensions of two years to be evaluated. The second stage of mine life extension involves a $5 million exploration programme. The initial phase of this programme focussed on a detailed ground gravity survey. This survey identified a target several hundred metres to the east of the historic aeromagnetic information. This target was modelled to remove the impact of the open pit void and the near surface interference. A 433m long reverse circulation hole (KTRC995) was successfully drilled to intercept the target. The results identified 28m @ 0.61% Cu, 0.14g/t Au and 2.6g/t Ag. The second phase will test both the up and down dip extent of mineralisation and also determine the lateral extent from the Giant Pit through the areas to the North. This work is likely to commence in early 2016 when the Giant cutback strip ratio reduces and copper production increases. Indonesia In 2013 action was taken to wind back expenditure at Hillgrove’s Indonesian assets at Bird’s Head in West Papua and Sumba Island in order to preserve cash, whilst continuing to pursue interest in the projects from potential investors. Hillgrove retained exploration care and maintenance teams at the project offices during the half year, with assistance from our Jakarta based joint venture partners. Hillgrove is continuing to pursue interested parties. Although the Board has taken the decision to simplify and consolidate Hillgrove, with a focus on Kanmantoo, the assets still have value and the Company will continue to pursue options to realise this value. Outlook The focus will be on progressing the cutback of the Giant Pit to gain access to the large orebody for the remainder of the current life of mine plan. This was to be the last major cutback under the current plan, however the reduced operating costs and refinancing has allowed for the planning of an additional cutback and mine life extension. The best immediate value is to access as quickly as possible the proven reliable, consistent grade and quality of the main Kanmantoo orebody. To supplement copper production during the Giant Pit cutback, the CPS plant will be operating. The upper levels of all pits contain significant amounts of oxide ore and during stripping operations it has been stockpiled. The CPS plant will process the stockpiled oxide and transition ore from time to time during the remainder of this year. Metal production and costs remain within the guidance provided for 2015:  Copper production for the half year to 30 June 2015 was 9,151t copper contained within concentrates and remains within the full year guidance of 18,500t to 20,500t.  Gold production for the half year to 30 June 2015 was 2,756ozs of gold contained within concentrates and remains within full year guidance of 5,000oz to 6,000oz.  C1 costs for the half year to 30 June 2015 of US$2.12 per lb copper produced ($2.71 per lb) remains within full year guidance of US$2.00 to US$2.25 per lb. Further reductions in corporate overheads and continuous improvements in site costs, productivity and throughput are planned. Focus will be on the continued optimisation of both ore mining and processing, and increases in mill capability to increase copper production and lower costs over the target mine life to 2021. Further exploration success may see the mine life extended beyond this date. 7. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Strategy and Growth Hillgrove announced on 25 May 2015 that Mr Steven McClare had been appointed as the new Chief Executive Officer and Managing Director and Mr Greg Hall would step down after two and a half years. This followed the Board’s renewed strategic focus on mine-site operations at Kanmantoo and the simplification and cost reduction initiatives across the Company. The strategic focus of the Company is on further improvements in performance and extensions of the mine life of the Kanmantoo Copper Mine, expansion of the Kanmantoo region resource through exploration, significant reduction in costs and creation of value for shareholders. With a successful hedging programme in place and belief in the long term underlying strength of the copper market, the Board believes this is the right time to position the Company for sustained copper production into the future. Expenditure on the Giant Pit cutback, exploration and the CPS plant together with lower costs and improved mine economics and the re-alignment of the debt maturity profile have all set up the prospect for strong returns and opportunities for a longer mine life. Review of consolidated financial results For the six months ended 30 June 2015, the net loss after tax was $44.9 million compared to net profit of $5.8 million in the comparative period. The loss includes impairment charges of $29.9 million for Indonesian exploration assets and $10.4 million (after tax) for Kanmantoo assets, which results in an underlying loss of $4.9 million. Income Statement Half Year Half Year June 2015 July 2014 Change 72.0 92.5 (20.5) - - - Cost of production - cash (51.2) (53.4) 2.2 Long term stockpile written off - cash (0.1) (4.6) 4.5 Materials and services costs (2.8) (2.6) (0.2) Employee expenses (2.2) (3.0) 0.8 Royalties (0.9) (1.1) 0.2 Corporate and other administration costs (1.6) (1.5) (0.1) Net foreign exchange gains/ (losses) (0.8) 0.7 (1.5) EBITDA 12.4 27.0 (14.6) Underlying EBITDA* 12.5 31.6 (19.1) Cost of production – non cash (17.1) (17.8) 0.7 Long term stockpile written off – non cash (0.1) (1.3) 1.2 Other depreciation and amortisation expenses (0.3) (0.4) 0.1 Impairment losses (44.7) - (44.7) Gains/ (losses) on derivative financial instruments (0.4) 0.4 (0.8) Net financing expenses (1.7) (1.8) 0.1 (Loss)/ profit before income tax (51.9) 6.1 (58.0) Income tax benefit/ (expense) 7.0 (0.3) 7.3 (Loss)/ profit after income tax (44.9) 5.8 (50.7) Underlying (loss)/ profit* (4.9) 7.7 (12.6) $ million Revenue from sale of concentrates Other income * Refer to table below for detail of underlying EBITDA and Underlying Profit 8. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Income Statement (continued) Underlying Profit $ million 6 months to 30 June 2015 Gross Tax Statutory (loss)/ profit after tax 6 months to 31 July 2014 Net Gross Tax Net (44.9) 5.8 Impairment - long term stock piles written off 0.2 (0.1) 0.1 5.9 (1.8) 4.1 (Gains)/losses on financial derivatives 0.4 (0.1) 0.3 (0.4) 0.1 (0.3) Impairment Losses 44.7 (4.4) 40.3 - - - 45.3 (4.6) 40.7 5.5 (1.7) 3.8 Prior period tax adjustments (0.7) (1.9) Underlying (loss)/ profit (4.9) 7.7 Underlying EBITDA $ million 6 months to 30 June 2015 6 months to 31 July 2014 Reported EBITDA 12.4 27.0 Impairment – long term stockpiles written off 0.1 4.6 Underlying EBITDA 12.5 31.6 The decrease in net profit after tax by $50.7 million on the previous period, resulting in a loss of $44.9 million in the current period was primarily due to:  Impairment of non-current assets In accordance with the Consolidated Entity’s accounting policies and processes regular impairment testing is carried out to ensure assets are not carried at more than their recoverable amount. As the recoverable amount can vary with market conditions, impairment testing is done at a point in time to reflect those market conditions. An impairment is not a write off but a provision which can be reversed in the event of improvements in market outlook or operational performance including mine life extensions. Based on the Board’s decision to simplify and consolidate the Group’s focus onto its Kanmantoo operations, the directors have decided to impair the full $29.9 million carrying amount of the Indonesian exploration assets, which are currently on care and maintenance. The directors believe the projects still have potential value and will continue to pursue options to realise this value. In view of the prevailing weaker economic climate, a more conservative valuation approach has been adopted resulting in a $14.8 million impairment charge against the Company’s Kanmantoo operations, which will reduce Kanmantoo’s carrying value to approximately $200 million.  Revenue generated in the six months to 30 June 2015 from the sale of copper concentrate of $72.0 million was a decrease of $20.5 million on the comparative period (31 July 2014: $92.5 million). The revenue of $72.0 million for the six months was generated at an average realised price of $3.61/lb (US$2.85/lb). Cash revenue received from the sale of concentrates was $24.7 million lower than the previous corresponding half year. This mainly reflects the lower volume of concentrate sold (39,818 dmt sold to June 2015 vs 50,709 dmt sold for half year July 2014) as the current half year was heavily reliant on ore sourced from the more technically difficult, lower grade Nugent and Emily Star satellite pits whereas the majority of revenue in 2014 was derived from a more reliable source in the Kavanagh pit at lower stripping ratios. As a result payable copper metal sold was about 23% down in volume to 9,151t from 11,438t with only a slight decrease in average realised price as the Company was largely protected from lower average spot prices through its forward sale contracts. The gold and silver by-product revenue also decreased by about $1.1 million from the previous corresponding half year. 9. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Income Statement (continued) Mining from Nugent and Emily Star has now been completed and revenue in the second half of 2015 will be derived from a combination of primary ore from the upper levels of the Giant Pit cutback area plus ore processed from existing oxide stockpiles through the CPS process, with these second half revenues also protected by the Company’s forward sale contracts.  Deferred mining costs in the statement of financial position as at 31 December 2014 of $2.8 million mainly relating to the Nugent and Emily Star pits were fully allocated to the cost of production during the six month period to 30 June 2015. As at 30 June 2015, deferred mining costs capitalised amounted to $5.5 million. This related to the pre-strip for the Giant Pit and is not expected to unwind within the next 12 months. Hence it has been included as mine development in property, plant and equipment.  During the period the long term stock piles were written down by $0.2 million (cash and non-cash) compared to $5.9 million in the comparative period. The lower write down was due to the smaller drop in copper spot prices.  Direct employee costs decreased by $0.8 million during the period due to the write back of short term incentives which were not paid and lower share option expense.  Net foreign exchange losses are due to the revaluation of the US$ borrowing facility and the timing between recording and receiving revenue.  Depreciation and amortisation expenses decreased to $17.6 million from $17.8 million in the previous period, mainly due to lower production.  During the six month period, there was a loss on financial derivatives of $0.4 million in comparison to a gain of $0.4 million in the previous period. The loss was the hedge ineffectiveness portion resulting from change in designation dates.  Income tax benefit is mainly due to the loss incurred during the period and finalisation of prior year tax return. No income tax benefit was booked for the impairment of the Indonesian exploration assets. Cash flow overview $ million June 2015 July 2014 Change 7.3 38.0 (30.7) (15.1) (25.4) 10.3 Net cash inflows/ (outflows) from financing activities 7.6 (16.9) 24.5 Net decrease in cash held (0.2) (4.3) (4.1) Cash and cash equivalents at the end of half year 8.6 12.1 (3.5) Net cash inflows from operating activities Net cash used in investing activities Operating activities Net cash inflows from operating activities for the six months ended 30 June 2015 were $7.3 million, which is $30.7 million lower than the prior period cash flow of $38.0 million. Payments to suppliers, employees and contractors increased by $6.0 million which, after the slight decrease in trade creditors is taken into account, reflects the higher outgoings associated with the rises in tonnes mined and tonnes milled compared to the previous corresponding half. $ million June 2015 July 2014 Change Receipts from customers 62.0 86.7 (24.7) Payment to suppliers, employees and contractors (54.7) (48.7) (6.0) 7.3 38.0 (30.7) Net cash inflows from operating activities 10. Hillgrove Resources Limited and its Controlled Entities ACN 004 297 116 Directors’ Report (continued) Operating and Financial Review (continued) Investing activities Cash flows used in investing activities amounted to $15.1 million in the current six months compared to an outflow of $25.4 million in the previous corresponding period. The decrease is in respect of capital works such as the Tailings Storage Facility extension and pre-strip from new pits of $14.9 million in comparison to $25.0 million in the previous period. The major TSF expenditure was for the remainder of the base layer and first lift which was completed in December 2014. There is only modest expenditure required for future lifts and hence the decrease in expenditure during this six month period. Financing activities $ million June 2015 July 2014 Change Net proceeds from issue of shares 9.3 - 9.3 Net proceeds from borrowings 17.2 - 17.2 Repayment of borrowings (18.0) (15.1) (2.9) Net interest paid (0.9) (1.8) 0.9 Net cash inflows/ (outflows) from financing activities 7.6 (16.9) 24.5 Cash flows relating to financing activities were an inflow of $7.6 million, compared to an outflow of $16.9 million in the comparative period. The inflows of $7.6 million are due to capital raising via a rights issue of $9.3 mi