Castillo Copper Ltd (ASX:CCZ) has appointed Merchant Corporate Advisory Pty Ltd to facilitate a placement to raise up to $2 million to ramp up developing the three strategic copper pillars in Australia and Zambia.
The placement at an issue price of the greater of 2 cents or 75% of the 15-day volume weighted average market price of the shares is being made at a premium to the current price of 1.7 cents.
Free attaching options exercisable at 5 cents within three years from issue will be issued with the shares on the basis of one option for every three shares issued.
Lead manager appointed
Merchant Corporate Advisory, an affiliate of Merchant Group Pty Ltd, has agreed to act as lead manager to the transaction and, on a best endeavours basis, subscribe for or procure the subscription of new shares to the value of $1 million.
Funds raised will be used to progress exploration programs at the three pillars - Cangai Copper Mine in NSW, Mt Oxide project in Queensland and the Zambian projects.
CCZ shares are up more than 13% in early trade to 1.7 cents.
Exploration expedited
Due to potentially securing this funding, the CCZ Board has resolved to expedite exploration across the three pillars, with work commencing at Mt Oxide, Cangai Copper Mine and priority Luanshya/Mkushi projects in Zambia as regulatory approvals are secured.
The pillars are key components of the company’s strategic intent to transform into a mid-tier copper group:
- Pillar I – Cangai Copper Mine: Plans are in place to advance this project through to bankable feasibility study;
- Pillar II – Mt Oxide project: Located in the Mt Isa copperbelt with three priority targets including a sizeable massive sulphide conductor, historic deposit and mine; and
- Pillar III – Zambia: Four highly prospective assets across the copperbelt which include priority Mkushi and Luanshya projects that are near operating copper mines.
Corporate advisor
The mandate also appoints Merchant as corporate advisor to CCZ for a minimum of 12 months to assist with developing a capital and equity management strategy and assist with the proposed listing on the London Stock Exchange (LSE).
CCZ said, “Attracting a quality institutional investor to the share register is an extremely significant development that clearly validates the three-pillared strategic intent to transform CCZ into a mid-tier copper group.”
Committed to LSE listing
This transaction is complementary to the secondary listing on the LSE, which is progressing steadily and for which the board remains completely committed.
Currently, all relevant inputs required to lodge the prospectus are nearing finalisation which should enable the prospectus to be lodged for its first LSE reading.
Further, CCZ’s UK corporate advisor, SI Capital, is completely supportive of this capital raising exercise and views it as totally complementary to the upcoming LSE listing.
Consideration details
In consideration for the services to be provided by Merchant, the company will:
- Pay Merchant a capital raising fee of 6% of the total amount of new capital raised by Merchant in any equity capital raising by the company;
- Issue to Merchant or its nominee 3 million shares and 10 million options at a nominal issue price of $0.00001 per share and option as a retainer fee. The options are exercisable at 5 cents and expire three years from the date of issue); and
- Issue to Merchant or its nominee 2 million shares at a nominal issue price of $0.00001 per share proceeding Castillo’s successful listing on the LSE main board.
Placement shares will be issued in a single tranche without shareholder approval under the company’s existing ASX placement capacity.