Far East Gold Initiates Share Purchase Plan to Fund Key Projects
FAR EAST GOLD LTD (FEG) Share Update July 2024 Wednesday 31st
Far East Gold Announces Share Purchase Plan to Raise $2 Million
Far East Gold Ltd (ASX: FEG) has announced a Share Purchase Plan (SPP) aimed at raising $2 million from eligible shareholders. The funds will be used to advance several key projects and for general working capital.
Instant Summary:
- Target raise of $2 million through the Share Purchase Plan.
- Subscription price set at $0.136 per share, a 20% discount to the 5-day VWAP.
- Funds to be used for the Idenburg, Woyla, and Trenggalek projects.
- Offer closes on 14 August 2024 at 5:00pm AEST.
- Non-underwritten offer with the right to accept applications beyond the target amount.
Overview of the Share Purchase Plan
Far East Gold Ltd (ASX: FEG) has launched a Share Purchase Plan (SPP) to raise $2 million. The SPP is open to eligible shareholders who were on the company's register at 7:00pm AEST on 30 July 2024 and have a registered address in Australia or New Zealand. The offer closes on 14 August 2024 at 5:00pm AEST.
The subscription price for the new shares is set at $0.136 per share, representing a 20% discount to the 5-day volume-weighted average price (VWAP) before the announcement date of 31 July 2024. Shareholders can choose from several investment options ranging from $2,000 to $30,000.
Use of Funds
The funds raised from the SPP will be allocated to various projects and general working capital. Specifically, the company plans to use the funds for:
- Idenburg project: JORC Resource Estimate 2012 and permitting.
- Woyla project: Desktop work, modelling, Indonesian Government Feasibility Study, and JORC Resource Estimate.
- Trenggalek project: Initial drilling program and permitting.
- General working capital and offer costs.
Offer Details
The SPP is not underwritten, and the company reserves the right to accept applications beyond the target amount, subject to compliance with ASX Listing Rules and ASIC regulations. The offer is non-renounceable, meaning shareholders cannot transfer their rights to participate in the SPP.
Eligible shareholders can apply for shares in increments ranging from $2,000 to $30,000. The company has outlined the following options:
- Option A: $30,000 for 220,588 shares
- Option B: $25,000 for 183,823 shares
- Option C: $20,000 for 147,058 shares
- Option D: $15,000 for 110,294 shares
- Option E: $10,000 for 73,529 shares
- Option F: $5,000 for 36,764 shares
- Option G: $2,000 for 14,705 shares
The company has appointed Reach Markets Pty Ltd as the Lead Manager for the SPP. Shareholders interested in participating can request an electronic copy of their personalized application form via the company's investor portal.
The Share Purchase Plan is expected to provide Far East Gold with the necessary capital to advance its key projects, potentially increasing the company's valuation and stock price in the long term. The 20% discount on the share price offers an attractive opportunity for existing shareholders to increase their holdings.
Investor Reaction:
Analysts have noted that the SPP provides a favorable opportunity for shareholders to invest at a discounted rate. The allocation of funds to key projects is seen as a positive step towards enhancing the company's value. However, the non-underwritten nature of the offer introduces some uncertainty regarding the total funds raised.
Conclusion:
Investors should consider participating in the Share Purchase Plan to take advantage of the discounted share price and support the company's growth initiatives. The closing date for the offer is 14 August 2024, and shareholders are encouraged to submit their applications promptly.