Gold Mountain Limited Announces $2.7 Million Placement to Accelerate Brazilian Exploration
GOLD MOUNTAIN LIMITED (GMN) Share Update August 2024 Sunday 4th
Gold Mountain Limited Secures $2.7 Million to Boost Exploration in Brazil
Gold Mountain Limited (ASX:GMN) has successfully raised $2.7 million through a placement to fund its exploration activities in Brazil and Papua New Guinea.
Instant Summary:
- Raised $2.7 million through a single-tranche placement.
- Issued approximately 729.7 million new shares at 0.37¢ per share.
- Strong support from new and existing investors, including a cornerstone investor contributing $2.3 million.
- Funds will be used to advance high-priority exploration targets in Brazil and Papua New Guinea.
Placement Details
Gold Mountain Limited (ASX:GMN) has announced the successful completion of a $2.7 million placement. The placement involved the issuance of approximately 729.7 million new fully paid ordinary shares at an issue price of 0.37¢ per share.
The placement received strong backing from both new and existing investors, with a cornerstone investor contributing $2.3 million. This investor will become the major shareholder of Gold Mountain and will have the right to appoint an additional director to the company's board.
Use of Proceeds
The net proceeds from the placement will be used to advance Gold Mountain's exploration activities at its high-priority rare earth element (REE) targets in Jequie, lithium in Lithium Valley, and niobium near Araxa in Brazil. Additionally, the funds will support exploration in the company's tenement package in Papua New Guinea.
Investor Support
Gold Mountain Executive Director David Evans expressed his satisfaction with the strong support from shareholders. 'We are very pleased with the strong support from both new and existing shareholders in this placement, including our cornerstone investor who will emerge as the major shareholder of Gold Mountain Limited,' he said. 'We are very excited to accelerate exploration activities across our Brazilian tenement package and particularly look forward to mobilising an additional Auger drill to site to target our high-priority REE targets which have yielded impressive results from recent stream sediment sampling.'
Key Dates
The placement was conducted at a price of 0.37¢ per share, representing a 5.7% premium to the last close price of 0.350¢ on 31 July 2024, a 3.5% discount to the 5-day Volume Weighted Average Price (VWAP) of 0.383¢, and a 6.6% premium to the 10-day VWAP of 0.347¢.
Participants in the placement will also be entitled to apply for one free attaching option for every two new shares allocated. These options will be exercisable at 0.55¢ each and will expire on 20 June 2027, subject to shareholder approval at an upcoming Extraordinary General Meeting (EGM) expected to be held in September 2024.
The new shares issued under the placement, as well as any shares issued upon the exercise of the attaching options, will rank equally with the existing ordinary shares on issue.
The successful placement and the strong support from investors, particularly the cornerstone investor, indicate confidence in Gold Mountain's exploration potential. The funds raised will enable the company to accelerate its exploration activities, which could lead to significant discoveries and value creation for shareholders. The appointment of an additional director by the cornerstone investor could also bring new expertise and oversight to the company's board.
Investor Reaction:
Analysts are likely to view the successful placement positively, as it provides Gold Mountain with the necessary funds to advance its exploration projects. The strong support from a cornerstone investor is a vote of confidence in the company's prospects. However, investors will be keen to see the results of the exploration activities and any potential discoveries that could drive further value.
Conclusion:
Gold Mountain Limited's successful $2.7 million placement is a significant step forward in advancing its exploration activities in Brazil and Papua New Guinea. Investors should monitor the progress of these exploration projects and the potential impact on the company's valuation. The strong support from investors and the appointment of a new director are positive indicators for the company's future prospects.