Tietto Minerals Ltd (ASX:TIE) is raising up to $62.5 million in a capital raising exercise aimed at delivering continued resource growth and advancing pre-development work at Abujar Gold Project in Côte d'Ivoire, West Africa.
The company has received binding commitments for an underwritten placement to raise $45 million and has also received commitments for a further non-underwritten placement of $12.5 million to raise a total $57.5 million through the issue of 92.7 million shares at 62 cents per share.
On top of this, Tietto will undertake a share purchase plan of up to $5 million for a total capital raising of up to $62.5 million.
“Exciting gold development story”
Managing director Caigen Wang said: “I am very proud of what the Tietto team has been able to deliver, driving rapid resource growth from a large high-grade gold deposit and doing so at an extremely low delivery cost.
“In doing so, Tietto has quickly developed into an exciting West African gold development story.
“I expect Tietto will continue to deliver a strong flow of activity in the weeks and months ahead as we provide regular drilling updates, deliver our mineral resource update expected in September 2020 and our pre-feasibility study in quarter one of 2021.”
The company has recently started pre-feasibility work at Abujar, with five company-owned drill rigs operating.
Funding from the placement will provide for additional mineral resource drilling over the next 12 months of about 45,000 metres as well as exploration drilling of 25,000 metres across multiple targets.
The company has agreed to issue up to 92.7 million fully paid ordinary shares at an issue price of A$0.62 to institutional and sophisticated investors in Australia and overseas, raising approximately $57.5 million, before costs.
Settlement will occur in two tranches:
In Tranche 1 the company will issue 35.2 million placement shares valued at $21.8 million pursuant to Listing Rule 7.1. No shareholder approval is required for the issue of these shares; and
In Tranche 2, which is subject to shareholder approval at a general meeting to be held in mid‐September 2020, the company will issue up to 55,929,033 million placement shares valued at $34.6 million.
In addition to the placement, Hanjing Xu, a non‐executive director of Tietto has agreed to subscribe to $730,000 and Tietto’s chairman Francis Harper has agreed to subscribe to $270,000 at the same price in the Placement, both are subject to shareholder approval.
The joint lead managers and the company have executed an underwriting agreement in respect of $45 million in the placement, covering all of Tranche 1 and $23.2 million in tranche 2.
The company has firm commitments in place for the balance of the tranche 2 placement which was made to a number of existing Tietto shareholders and other professional and sophisticated investors.
Share purchase plan
Tietto will undertake a share purchase plan of up to A$5 million, giving existing eligible shareholders the ability to apply for up to $30,000 of shares at the same price as the placement.
Under the SPP, Tietto shares will be offered at the placement price of A$0.62 and Tietto reserves the right (in its absolute discretion) to scale back applications under the SPP if demand exceeds A$5 million.
The record date for the SPP is 5:00pm (Perth time) on Friday, July 31, 2020, and is open to all eligible shareholders in Australia and New Zealand.