North Stawell Minerals to Raise $1.3M for Exploration Program
NORTH STAWELL MINERALS LTD (NSM) Share Update September 2024 Monday 23rd
North Stawell Minerals Announces $1.3M Equity Raising for Exploration
North Stawell Minerals Ltd (ASX: NSM) has announced an equity raising of approximately $1.3 million to fund its exploration programs and cover general working capital costs.
Instant Summary:
- $1.3 million equity raising via placement and entitlement offer.
- Placement of shares to raise approximately $0.2 million.
- Fully underwritten 4 for 5 non-renounceable entitlement offer to raise approximately $1.1 million.
- Offer price set at $0.01 per share, a 28.6% discount to the last closing price.
- Proceeds to fund exploration at Wildwood and Darlington-Caledonia and cover general working capital.
Equity Raising Details
North Stawell Minerals Ltd (NSM) has announced an equity raising of approximately $1.3 million through a combination of a share placement and a non-renounceable entitlement offer. The placement aims to raise around $0.2 million, while the fully underwritten entitlement offer is expected to raise approximately $1.1 million.
The offer price for both the placement and the entitlement offer is set at $0.01 per share, representing a 28.6% discount to NSM's last closing price of $0.014 per share as of 19 September 2024. The entitlement offer is fully underwritten by Henslow Pty Ltd, ensuring that the targeted funds will be raised.
Use of Funds
The proceeds from the equity raising will be used to fund exploration and drilling programs at the Wildwood and Darlington-Caledonia sites. Additionally, a portion of the funds will be allocated to general working capital and to cover the costs associated with the equity raising.
The company plans to issue approximately 132,800,627 new fully paid ordinary shares under the equity raising. These new shares will rank equally with existing NSM shares and will be quoted on the ASX.
CEO's Comments
Campbell Olsen, CEO of NSM, expressed excitement about the equity raising, stating, 'We’re particularly encouraged and excited about the deep exploration knowledge the past three years of hard work has produced. We’re now moving into Phase 2 of our strategy, which is to focus on those assets that will hopefully move us to production in the shortest possible time.'
Olsen also highlighted the company's Memorandum of Understanding with Stawell Gold Mines for potential future ore purchase, which he believes will expedite NSM's path to production.
This equity raising is expected to provide North Stawell Minerals with the necessary capital to advance its exploration projects, potentially leading to significant discoveries. The fully underwritten nature of the entitlement offer provides a level of security for the company and its investors. However, the dilutive effect of issuing new shares at a discount may impact the stock price in the short term.
Investor Reaction:
Analysts are likely to view the equity raising as a positive step towards advancing NSM's exploration projects. The fully underwritten offer indicates strong support from the lead manager, Henslow Pty Ltd. However, some investors may be concerned about the dilution of their existing shares and the discounted offer price.
Conclusion:
Investors should consider the long-term potential of North Stawell Minerals' exploration projects and the strategic benefits of the equity raising. Monitoring the progress of the exploration programs at Wildwood and Darlington-Caledonia will be crucial in assessing the company's future prospects.