Chalice Mining Ltd (ASX:CHN) (OTCMKTS:CGMLF) (FRA:C8U) has closed its Share Purchase Plan (SPP) announced on December 1, 2020, after strong support by eligible shareholders with more than 2,300 applications received totalling around A$47 million at the issue price of A$3.75 per share.
Given the response to the SPP, the company’s board of directors has exercised its discretion to increase the SPP offer to around A$15 million from the original A$10 million targeted in recognition of the long-term support of its retail investors.
A total of around 4 million new fully paid ordinary shares will be issued, representing about 1.2% of Chalice’s ordinary shares on issue.
“Testament to quality of Julimar”
Chalice managing director Alex Dorsch believes the strong demand is due to the quality and scale of the multi-element discovery made at the company’s 100%-owned Julimar Nickel-Copper-PGE Project last year.
He said: “I would like to thank our shareholders for their overwhelming support.
“The demand for the SPP was incredibly strong, which is testament not only to the scale and quality of our discovery at Julimar but also its potential to become a new world-class mineral province in Western Australia.”
The company completed a successful A$100 million institutional placement on December 8, 2020 for the same issue price as the SPP.
The strong demand from eligible shareholders in the SPP has necessitated a scale-back of valid applications.
Dorsch said: “In light of the strong response, the board made the decision to upsize the SPP by 50%, after taking into consideration our capital requirements.
“The combined proceeds of the recent placement and this SPP will ensure Chalice remains financially strong well into the future, with the ability to rapidly advance Julimar to the feasibility stage.”
Those eligible shareholders holding less than 124 shares (being a marketable parcel on the record date of November 30, 2020) will be allocated 135 shares and, on a pro-rata basis, all remaining eligible shareholders who submitted valid applications have been allocated around 34% of their application amount.
The effect of the scaling is set out in the table above.
Payment of refunds for scaled back applications, as well as late and invalid applications, is expected to commence on Friday, January 22, 2021.
The SPP shares are expected to be issued on Thursday, January 21, 2021, and commence trading on the ASX on Friday, January 22, 2021.
Funded for future drilling
Chalice is fully funded to continue its 6-rig resource definition drill program and reconnaissance exploration activities at Julimar with planned initial reconnaissance activities expected to define drill-ready targets, which will then form the basis of a second stage approval process for drill testing.
The company anticipates this drilling to ultimately determine the scale and extent of Julimar as a new multi-discovery mineral district.