Musgrave Minerals Ltd (ASX:MGV) (OTCMKTS:MGVMF) (FRA:6MU) has received firm placement commitments from corporate, institutional and sophisticated investors to raise A$16 million and is arranging a Share Purchase Plan (SPP) to raise an additional A$2 million.
The placement at an issue price of A$0.36 per new share was underpinned by corporate and institutional investors as well as existing shareholders.
Use of funds
Proceeds from the placement and SPP will be used to accelerate exploration and development activities at Musgrave's flagship Cue Gold Project in WA, including:
- Drilling of around 30,000 metres to test high-grade and high-priority gold targets identified in recent regional drilling, including resource definition drilling of the new White Heat discovery;
- Commencement of pre-feasibility studies on the Break of Day and Lena deposits;
- Continuation of studies to inform the mining proposal approvals;
- Further conversion of inferred resources into the higher confidence indicated category at Break of Day and Lena; and
- Continuing the successful regional exploration drilling program.
“Unlocking value of project”
Musgrave managing director Rob Waugh said: “Through accelerated exploration and a focus on resource growth we can ensure we unlock the value of the project as a strategic asset.
“This work together with the pre-feasibility study on the existing high-grade, near-surface Break of Day resource and the adjacent Lena deposit, will maximise our ability to create value for shareholders through discovery, resource growth and project development.
“I’d like to welcome the new investors to the company and we are pleased to offer existing eligible shareholders an opportunity to participate through the SPP at the same price as the placement.”
The placement will see the company issue 44,444,445 shares at a price of A$0.36 per new share and this represents a 15.3% discount to Musgrave’s last trading price and a 9.6% discount to the 15-day volume-weighted-average price (VWAP).
The placement has been undertaken using the company’s available placement capacity under ASX Listing Rule 7.1 and it expects to issue the new shares on or around December 18, 2020.
Canaccord Genuity (Australia) Limited and Veritas Securities Limited acted as joint lead managers and bookrunners to the placement while Euroz Hartleys Limited acted as co-manager.
Share Purchase Plan
Along with the placement, the company has also announced an SPP to raise A$2 million, under which existing eligible shareholders will be allowed to acquire shares up to a maximum of A$30,000 at the same issue price as placement shares.
The company reserves the right to accept oversubscriptions and/or scale back applications.
Participation in the SPP is voluntary and is available exclusively to shareholders, who are registered as holders of shares on the record date of December 11, 2020, and whose registered address is in Australia or New Zealand.
The SPP will be conducted as an exception to the company's placement capacities under the Listing Rules of the ASX.
Following completion of the placement and SPP, the company will have a cash balance of approximately A$24 million.