Pure Minerals Ltd (ASX:PM1) has received firm commitments from institutional and sophisticated investors to raise $4.4 million via a share placement of more than 293 million fully paid ordinary shares at an issue price of 1.5 cents per share.
Funds raised will support pilot plant activities for the company’s Townsville Energy Chemical Hub (TECH) Project in Queensland.
The placement was strongly supported with demand significantly in excess of funds sought by the company.
“Funding essential workstreams”
Proceeds will be used for pilot plant activities for the TECH Project, commencement of a bankable feasibility study and project approvals as well as corporate and admin costs and working capital.
Pure Minerals chief executive officer Stephen Grocott said: “We continue to gain momentum with a number of potential offtakers for the TECH Project.
“It is important that we operate the pilot plant to demonstrate the TECH Project flowsheet on our New Caledonian ore and to generate product samples for testing by these groups.
“The funds raised in this placement enable us to undertake that work but also to commence other essential workstreams such as preparing for a bankable feasibility study and project approvals.”
The placement will be conducted in two tranches.
Tranche one will result in issuing 106,248,632 shares using the company’s available placement capacity, comprising 79,464,786 shares under the Listing Rule 7.1 15% placement capacity and 26,783,846 under the additional Listing Rule 7.1A placement capacity.
A second tranche of 187,084,702 shares will be issued subject to shareholder approval at a general meeting of shareholders which is expected to be held in October 2020.
The issue price represents a 19% discount to the 15-day VWAP and shares issued under the placement will rank equally with existing shares.
Lead manager for the placement was Foster Stockbroking Pty Ltd.