Emmerson Resources Limited (ASX:ERM) (FRA:42E) has received a strong response to its $1 million share purchase plan (SPP) and will accept the $1.245 million in shareholder oversubscriptions.
Given the support shown by shareholders, the board decided to use its discretion under the terms of the SPP and accept all shareholder applications.
The company believes the overwhelming response validates its strategy focused on gold.
Use of funds
Funds raised will be used to accelerate exploration across Emmerson’s NSW projects, support its emerging gold royalty business in Tennant Creek and, evaluate new opportunities under the strategic alliance with Longreach Minerals Exploration.
The purpose of the SPP was to allow eligible shareholders the right to participate on equal terms as participants in the placement component of the $4.575 million capital raising.
Shares are 5% higher to 10.5 cents.
To accommodate the oversubscriptions, ERM will issue an addendum to the notice of meeting of the general meeting to be held on August 24, 2020, and a supplementary prospectus to update the disclosure made in the prospectus lodged on July 13, 2020.
The addendum amends the number of attaching options to be issued under the SPP subject to shareholder approval from 10 million to 22.45 million.
This increase is required to allow one option to be issued for each share issued in respect of the oversubscriptions, reflecting the increase in funds received from $1 million per the SPP booklet to actual funds received of $2.245 million.
Emmerson will issue new fully paid ordinary shares in the capital of the company under the SPP on August 11, 2020, in accordance with the timetable set out in the prospectus.
The options under the SPP will be issued as soon as practicable following the general meeting, subject to obtaining shareholder approval at that meeting.
This SPP was part of a $4.575 million capital raising with the primary aim of accelerating exploration across Emmerson’s suite of highly prospective gold and gold-copper projects in the Lachlan Fold Belt of NSW.
The SPP allowed eligible shareholders to apply for a maximum of $30,000 worth of shares at an issue price of 10 cents per share, together with one SPP option for every one SPP share subscribed for and issued.