Proactive Investors - Run By Investors For Investors

Alto Metals will use $2.6 million to fast-track drilling at Sandstone Gold Project

Commitments secured from this placement will enable Alto to accelerate drilling, progress further exploration, resource study work and cover general working capital.
Australian flag and share market board
Empire Capital Partners and Bluebird Capital acted as joint lead managers to the shortfall placement

Alto Metals Ltd (ASX:AME) has secured firm commitments to raise more than $2.047 million by way of an oversubscribed shortfall placement of almost 57 million shares at 3.6 cents per share.

The placement, which includes one free attaching unquoted option exercisable at 7 cents for every 2 shares subscribed for, attracted strong demand from several boutique funds and investors in Australia, including an equity funded drilling contract up to $350,000.

Premium of 44% to takeover offer

The shortfall placement price represents a premium of 44% to the implied offer price of 2.5 cents under Middle Island Resources Ltd’s (ASX:MDI) unsolicited takeover offer, being five MDI shares for every one Alto share.

This also represents a 10% discount to the closing Alto share price of 4 cents prior to announcing the capital raising.

"Endorsement" of project

Alto chairman Terry Wheeler said: “Alto is extremely pleased with the interest and support from investors which represents a strong endorsement of Alto’s Sandstone Gold Project, technical capabilities and ongoing strategy to generate and drill test a pipeline of highly prospective exploration targets.

“With this funding secured, we can commence the aggressive drilling campaign of approximately 10,000 metres targeting high-grade gold at several known prospects at Havilah, Vanguard and Lord Nelson in addition to exploration at a number of new targets we have identified.”

READ: Alto Metals board recommends shareholders reject Middle Island offer

The placement was completed in relation to the shortfall of the company’s non-renounceable entitlement offer detailed in the prospectus on January 24, 2019.

Settlement of the shortfall placement is expected to occur on Friday, May 10, 2019, with shares to be allotted and the start of trading on or around May 13, 2019.

The new shares will rank equally with the company’s existing fully paid shares.

Placement to chairman

Alto also intends to raise a further $600,000 through a placement to chairman and major shareholder Terry Wheeler to maintain his interest in the company.

This placement is to be made on the same terms as the shortfall placement and is subject to shareholder approval.

Total commitments of more than $2.647 million secured from both the shortfall Pplacement and placement will enable Alto to fast-track drilling at its flagship Sandstone Gold Project.

Funds will also enable the company to progress further exploration, resource study work and cover general working capital.

View full AME profile View Profile

Alto Metals Ltd Timeline

Related Articles

vein graphite
March 28 2019
The company is exploring and developing graphite mines in historic jurisdictions in Sri Lanka
1547726049_zinc-periodic-3.jpg
January 17 2019
Constantine Metals has a broad portfolio of assets in Alaska and Ontario
Inspection at Cangai property
April 29 2019
The company has the Cangai Copper Project in northern NSW as its flagship asset.

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use