Havilah Resources Ltd (ASX:HAV) aims to raise around $5.46 million in a non-renounceable pro-rata rights issue to help fund an ambitious work program at its suite of projects in northeast South Australia.
Under the offer, a maximum of 54,565,835 shares will be issued at 10 cents per share to raise up to $5,456,584.
The issue price represents a discount of about 19% to the volume weighted average price of the company’s shares during the 30-trading day period up and including October 16, 2019.
Each eligible shareholder will be entitled to subscribe for one new fully paid ordinary share for every four shares held as at the record date.
In addition to being able to apply for new shares under the rights issue, eligible shareholders will also be able to apply for additional new shares that are not subscribed for under the rights issue.
The indicative timetable for the rights issue.
Two large shareholders commit
Havilah’s two large shareholders have indicated that they will take up their entitlements and their intention to subscribe for up to $3 million worth of shortfall shares if available.
The company said this offer would provide an opportunity for shareholders to gain exposure to Havilah’s high leverage to copper, gold and cobalt in a projected positive commodities cycle for these metals.
It was also an opportunity for those shareholders with less than a marketable parcel of shares to increase their holding to a marketable parcel.
Use of funds
The company plans to use the funds to:
- Complete the Kalkaroo project pre-feasibility update;
- Conduct pre-feasibility studies of the Grants Basin Iron Ore Project and Mutooroo Copper-Cobalt Project;
- Conduct exploration of regional copper-gold targets;
- Pay the costs of the issue and corporate costs;
- Investec loan repayment;
- Re-structuring; and
- General working capital.
“Optimistic about future”
As a prudency measure, Havilah has entered into a short-term standby loan offer from a major shareholder for $500,000 that will ensure it is able to meet financial commitments until it receives proceeds from the rights issue.
In a statement regarding the rights issue, the company said: “Your directors are optimistic about the future prospects of Havilah given its high-quality mineral projects and exploration upside on its extensive tenement holding.
“They recommend this as an excellent opportunity for shareholders to take advantage of Havilah’s high leverage to gold, copper and cobalt markets by acquiring new shares at an attractive price."