Chase Mining Corporation Ltd (ASX:CML) has embarked on a capital raising exercise to boost its bank balance by up to A$1.396 million to allow for additional drilling at its highly prospective Canadian projects.
The company has received firm and binding commitments from sophisticated and professional investors to raise A$646,756 in a private placement.
SPP to raise up to $750,000
In addition, Chase Mining is conducting a share purchase plan (SPP) for eligible shareholders with the intention of raising up to A$750,000.
The issue price for shares in the private placement and SPP is A$0.0125 per share.
This is an 18.2% discount to the Volume Weighted Average Market Price (VWAP) over the last five days on which sales of shares are recorded prior to the announcement of the SPP to ASX on May 28, 2020.
Shares have climbed from A$0.006 at close on March 30 to A$0.017 cents at the previous close.
Additional drilling plans
Although CML has sufficient funds for budgeted drilling at Zeus prospect within the Alotta project and for working capital requirements, the board believes it is wise to have extra funds for additional drilling.
Positive market fundamentals for gold and PGEs, including strong prices, support this view.
As such, the board aims to allocate the additional funds for further drilling at the Lorraine and/or Alotta projects in Quebec, pending positive results.
The placement will result in the issue of 51,740,480 new fully paid ordinary shares in CML.
Settlement is scheduled for June 1, 2020, with allotment of new shares planned for June 4, 2020.
GTT Ventures Pty Ltd acted as lead manager to the placement.
Under the SPP eligible shareholders, being those with a registered address in Australia or New Zealand on May 27, 2020, will have the opportunity to purchase up to $30,000 worth of shares in the company at a discount and without incurring brokerage or transaction costs.
Eligible shareholders will be able to participate by subscribing for shares in multiples of $6,000, subject to a scale back at the directors’ discretion and the Listing Rules.
The SPP is not underwritten, however, CML reserves its right to place any shortfall under the SPP at a price not less than the issue price in accordance with its share issue capacity under the Listing Rules.
An offer booklet for the SPP will be mailed to eligible shareholders on or about 2 June 2020 and the SPP offer will close on 16 June 2020.