Ora Banda Mining Ltd (ASX:OBM) (FRA:M6N) has completed a placement and institutional entitlement offer bookbuild for $51.7 million and will undertake an underwritten retail entitlement offer for another A$3.3 million, opening on July 10, 2020.
The company received firm commitments of around A$40 million for its placement to institutional investors and approximately A$11.7 million for the institutional component of its 1 for 9 accelerated non-renounceable pro-rata entitlement offer of new fully paid ordinary shares.
This placement and institutional entitlement offer will raise a total of A$51.7 million at A$0.23 per new share on completion.
The retail component of the entitlement offer will raise a further A$3.3 million, and the placement and entitlement offer will collectively raise A$55 million (before costs).
Plan to recommence gold production
Proceeds from the equity raising, together with existing cash, will see Ora Banda fully funded for the capital costs and working capital requirements of recommencing production at Davyhurst, targeted for January 2021.
Ora Banda managing director David Quinlivan said: “We are very pleased with the strong support of our largest shareholders as the company raises the capital required to recommence gold production at Davyhurst.
“Importantly, the capital raising ensures that Ora Banda remains debt-free as it proceeds towards gold production in January 2021.
“We are proud to welcome a number of new, high-quality institutional investors located both domestically and internationally.
“We are also pleased to provide existing retail shareholders with the ability to participate in the retail entitlement offer, on the same terms as institutional shareholders and investors.”
The equity raising also provides funding to ensure minimum ongoing exploration programs across the company’s 1,350 square kilometres prospective landholding are met.
The new shares offered under the placement will be issued in two tranches:
- 77,769,479 new shares to be issued to professional and sophisticated investors, raising around A$17.9 million (tranche one); and
- 96,143,565 new shares to be issued to Hawke’s Point and a director, raising around A$22.1 million (tranche two).
Major shareholder Hawke’s Point’s relevant interest in the company will reduce from 44.99% following the issue of new shares under tranche one of the placement and the entitlement offer.
If shareholders approve tranche two of the placement, Hawke’s Point’s relevant interest in the company will increase to up to 47.13%.
The new shares issued under tranche two are subject to shareholder approval.