Black Rock Mining Limited (ASX:BKT) has launched a fully underwritten entitlement issue to raise $1.65 million and has received strong support from its major shareholder, the Copulos Group, which has committed to apply for its full entitlement.
The issue, which is on the basis of 1 new share for every 16 shares at an issue price of 4.2 cents per share, is fully underwritten by lead manager Lazarus Corporate Finance Pty Ltd.
It includes one free attaching option for every one share subscribed, exercisable at 8.4 cents within three years from the date of issue.
Use of funds
Funds raised will go towards progressing the POSCO strategic alliance and development MoU, progressing the process on reaching an accord on the Tanzanian Government’s 16% free-carried interest and working capital.
The company directors are pleased that the Copulos Group, which has a 22.3% stake, is backing the offer and has committed to apply for its full entitlement amounting to $365,000. They consider this a strong show of support.
Black Rock managing director and CEO John de Vries said: “Following on from our recent announcements relating to the formation of a Strategic Alliance & Development accord with POSCO and that the TIB Development Bank Ltd has commenced due diligence on the company’s Mahenge Graphite Project we are delighted to offer our loyal supporters the opportunity to participate in this entitlement offer.
“Whilst we are all frustrated that the development timeline has taken longer than anticipated, we believe the company has considerably de-risked the project risks and we are now focused on progressing the negotiations with the Tanzanian government on their 16% free carry interest.
Prospectus for offer
This new offer will result in 39,308,982 new shares and 39,308,982 new options being issued.
The company expects to lodge a prospectus for the purpose of the offer with the ASIC on or about July 6, 2020.
de Vries added: "We have reduced costs to allow the company to keep open the development option over our Mahenge Graphite Project with the funds raised from this offer to be focused on progression of the POSCO relationship and the Tanzanian Free Carry Interest process and for general working capital.”
Shares have been as much as 15% higher to 5.6 cents.