Xanadu Mines Expands Share Placement to Boost Funding for Key Projects
XANADU MINES LTD (XAM) Share Update November 2024 Thursday 14th
Xanadu Mines Expands Placement to $7.5 Million
Xanadu Mines Ltd has announced an expansion of its recent share placement, increasing the total funding to $7.5 million. This move is aimed at supporting the company's key mining projects and future exploration activities.
Instant Summary:
- Placement expanded by $2 million to $7.5 million.
- Includes 10 million new shares to an Australian investor.
- Zijin Mining Group to maintain 19.42% stake with 26.5 million new shares.
- Funds to support Red Mountain and Sant Tolgoi projects.
Placement Expansion Details
Xanadu Mines Ltd has successfully expanded its previously announced share placement. Initially set to raise approximately A$5.5 million, the placement has now been increased by $2 million, bringing the total to $7.5 million. This expansion involves the issuance of 36.5 million additional shares at a price of $0.055 per share.
The first agreement involves a new Australian sophisticated investor acquiring 10 million shares. This transaction is unconditional and will be completed under the company's existing placement capacity. The allotment of these shares is scheduled for 15 November 2024.
Zijin Mining Group's Involvement
The second agreement is with Zijin Mining Group, Xanadu's largest shareholder. Zijin will acquire 26.5 million shares to maintain its pro-rata ownership of 19.42% in Xanadu. This transaction is conditional upon shareholder approval, which will be sought in an Extraordinary General Meeting scheduled for December.
Following this placement, Zijin will hold approximately 359.8 million ordinary shares in Xanadu. The necessary approvals from the Australian Foreign Investment Review Board have already been secured.
Utilization of Funds
The proceeds from this expanded placement will be directed towards Xanadu's key projects, including the Red Mountain Copper-Gold Project and the Sant Tolgoi Nickel-Copper Project. Additionally, the funds will support new project acquisitions, exploration activities, and the Khuiten JV's feasibility study scheduled for Q1 2025.
The issue price of $0.055 represents a 14.1% discount to the closing price on 31 October 2024, which was $0.064 per share. The new shares will rank equally with Xanadu's existing fully paid ordinary shares.
The expansion of the share placement is a positive signal of investor confidence, particularly from Zijin Mining Group, a major shareholder. This additional funding will enable Xanadu Mines to advance its strategic projects, potentially enhancing the company's long-term growth prospects and shareholder value.
Investor Reaction:
Analysts are likely to view this development positively, as it demonstrates strong backing from key investors and provides Xanadu with the financial resources needed to pursue its ambitious project plans. However, the shareholder approval required for Zijin's participation may introduce some short-term uncertainty.
Conclusion:
Investors should keep an eye on the upcoming Extraordinary General Meeting for shareholder approval of Zijin's share acquisition. The successful expansion of the placement positions Xanadu Mines well for future growth and exploration success.