North Stawell Minerals Launches $1.3 Million Equity Capital Raising for Exploration
NORTH STAWELL MINERALS LTD (NSM) Share Update September 2024 Monday 23rd
North Stawell Minerals Announces $1.3 Million Equity Capital Raising
North Stawell Minerals Ltd (ASX:NSM) has announced an equity capital raising initiative aimed at generating $1.3 million to fund exploration and drilling activities in the Stawell Corridor, Victoria.
Instant Summary:
- Equity capital raising of $1.3 million before costs.
- Placement of 20.9 million shares at $0.01 per share.
- Fully underwritten 4-for-5 pro rata non-renounceable entitlement offer.
- Proceeds to focus on exploration and drilling at Wildwood and Darlington-Caledonia.
Equity Capital Raising Details
North Stawell Minerals Ltd (NSM) has launched an equity capital raising initiative to generate approximately $1.3 million before costs. The capital raising comprises a placement of 20.9 million fully paid ordinary shares at $0.01 per share, amounting to $0.2 million, and a fully underwritten 4-for-5 pro rata non-renounceable entitlement offer representing approximately 111.9 million fully paid ordinary shares at $0.01 per share, amounting to $1.1 million.
The entitlement offer is fully underwritten by Henslow Pty Ltd and fully sub-underwritten by C&P Entities Pty Ltd. The placement is not underwritten. The offer price of $0.01 per new share represents a 17.0% discount to the Theoretical Ex-Rights Price (TERP) of $0.012, a 28.6% discount to the last closing price of $0.014, a 40.4% discount to the 5-day Volume Weighted Average Price (VWAP) of $0.017, and a 37.3% discount to the 15-day VWAP of $0.016.
Use of Proceeds
The proceeds from the equity capital raising will be used to focus exploration and drilling activities at the Wildwood and Darlington-Caledonia prospects, as well as for working capital. These areas have been identified as having significant potential for gold mineralization, similar to the Stawell Gold Mine.
Exploration Program
NSM has consolidated 504 square kilometers (60km strike) in the Stawell Corridor, which borders the Stawell Gold Mine heading northwest along strike. The Stawell Corridor has the same geology and potential for gold mineralization as the mine at Stawell. The exploration program aims to discover large, shallow gold deposits preserved under a thin blanket of Murray Basin sediments.
The Wildwood and Darlington-Caledonia targets are prioritized due to their potential to be repeats of the Stawell-like mineralization. NSM's tenements are immediately adjacent to Stawell Gold Mines' mining license in the same geological sequence. The Stawell Gold Mine has yielded nearly 5 million ounces of gold from the margins of a large basalt dome known as the Magdala Dome.
The equity capital raising is expected to provide North Stawell Minerals with the necessary funds to advance its exploration and drilling activities. This could lead to significant discoveries, potentially increasing the company's value and stock price. However, the dilution of shares might have a short-term negative impact on the stock price.
Investor Reaction:
Analysts are likely to have mixed reactions. While the capital raising provides NSM with the funds needed for exploration, the dilution of shares might concern some investors. The success of the exploration program will be crucial in determining the long-term impact on the stock price.
Conclusion:
Investors should monitor the progress of North Stawell Minerals' exploration activities and assess the potential long-term benefits of the capital raising. The company's strategic focus on high-potential targets could lead to significant discoveries and increased shareholder value.