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Australian Strategic Materials gains strong endorsement of metals strategy by attracting two new substantial holders

Published: 11:45 09 Apr 2021 AEST

Australian Strategic Materials Ltd - Australian Strategic Materials gains strong endorsement of metals strategy by attracting two new substantial holders
Both have participated in the company’s A$65 million placement.

Australian Strategic Materials Ltd (ASX:ASM) (OTCMKTS:ASMMF) has received a strong endorsement of its integrated metals production strategy centred on rare earths by attracting two new substantial shareholders.

Prominent resources sector investor FIL Limited and its related entities now hold a 5.82% stake while Chapelgreen Pty Ltd and its related entities hold a 5.66% stake.

Substantial shareholder status was reached by both on April 6 following participation in the company’s A$65 million placement.

FIL, which has a strong presence in Sydney, Hong Kong and Singapore holds 7,795,880 shares that have been accumulated in transactions during March and April of 2021 while Melbourne-based Chapelgreen has 7,581,667 securities.

ASX success story

The company has been a major ASX success story since listing in late July 2020 with shares trading in the range of 84 cents to $6.840 while the market cap has grown to approximately $676.2 million.

ASM received firm commitments from sophisticated, professional and institutional investors for the placement of about 13.5 million fully paid ordinary shares at $4.80 per share, raising $65 million in gross proceeds.

$41 million entitlement offer

It is now proceeding with an entitlement offer to raise up to a further $41 million with some of ASM’s largest shareholders committing to take up approximately 29.4% of entitlements under this offer.

On completion of the placement, ASM managing director David Woodall said: “We are delighted to have completed the placement component of this raising from existing and new international and Australian institutional investors.

“I am very pleased to welcome new shareholders to the company, who join our register at a truly exciting time as we finalise plans to develop our first metallisation facility in Korea.

“The funds raised significantly bolster our balance sheet, placing the company in a strong position as we progress key workstreams, which include development of the proposed Korean Metals Plant and advancing key FEED workstreams on the Dubbo Project in New South Wales.

“Importantly, we continue to advance our strategy for sustainable growth, with a primary focus on developing ASM into a globally relevant, independent and integrated metals producer by 2022.”

Use of funds

Proceeds from the placement and entitlement offer will be primarily used as follows:

  • Fund the final stage of engineering and construction of ASM’s proposed Korean Metals Plant (KMP);
  • Further engineering (FEED) work in relation to the Dubbo Project in NSW;
  • Corporate costs; and
  • Working capital and offer costs.

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