Redcastle Resources Limited - A$3.7 Million Fundraising Initiative
REDCASTLE RESOURCES LIMITED (RC1) Share Update September 2024 Tuesday 17th
Redcastle Resources Announces A$3.7 Million Fundraising Initiative
Redcastle Resources Limited (ASX: RC1) has announced a significant fundraising initiative, securing A$3.7 million through a two-tranche placement and a share purchase plan (SPP).
Instant Summary:
- Redcastle Resources secures firm commitments for A$2.8 million two-tranche placement.
- Share purchase plan to raise up to A$0.9 million.
- Placement price set at A$0.009 per new share.
- Funds to be used for drill programs, studies, and fieldwork at the Redcastle Project Area.
- Significant discounts offered: 18% to last close price, 20% to five-day VWAP, 25% to 15-day VWAP.
Placement Details
Redcastle Resources Limited has secured firm commitments for a A$2.8 million two-tranche placement at A$0.009 per new share. The placement price represents an 18% discount to the last close price, a 20% discount to the five-day volume-weighted average price (VWAP), and a 25% discount to the 15-day VWAP as of 13 September 2024.
Approximately 77.3 million new shares will be issued under tranche one, raising about A$695,700 before costs. An additional 233.3 million new shares will be issued under tranche two, subject to shareholder approval, raising approximately A$2.1 million before costs. Non-executive Director Ronald Miller will participate in tranche two for A$100,000, pending shareholder approval.
Share Purchase Plan (SPP)
Redcastle will also offer eligible shareholders the opportunity to participate in a share purchase plan (SPP) to raise up to A$0.9 million. The SPP allows eligible shareholders to purchase up to A$30,000 worth of new shares at the same price as the placement. The SPP is expected to open on 20 September 2024 and close on 18 October 2024.
Use of Funds
The funds raised from the placement and SPP will be used for drill programs, studies, and fieldwork at the Redcastle Project Area. Additionally, the funds will support working capital and cover the costs of the capital raising.
Broker and Manager Details
Xcel Capital Pty Ltd acted as the sole lead manager and bookrunner for the placement and SPP. Xcel will receive a lead manager fee of A$60,000 plus GST, an equity raising fee equal to 6% of the total amount raised, and 45 million unlisted options over unissued shares, each with an exercise price of A$0.01 and an expiry date of 30 October 2028.
This fundraising initiative is expected to provide Redcastle Resources with the necessary capital to advance its projects and operations. The significant discount on the new shares could attract strong investor interest, potentially boosting the company's stock price in the short term. However, the dilution effect from the issuance of new shares may temper some of the positive impacts.
Investor Reaction:
Analysts are likely to view this fundraising initiative positively, given the clear use of funds for advancing key projects. The significant discounts offered may also be seen as an attractive entry point for new investors. However, existing shareholders might be concerned about the dilution of their holdings.
Conclusion:
Investors should consider participating in the SPP and monitor the progress of the Redcastle Project Area. The successful execution of the planned drill programs and studies could significantly enhance the company's value and future prospects.