Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF, FRA:NYG1) has completed a heavily oversubscribed share purchase plan (SPP), raising A$6 million and adding to the A$22 million received under its placement completed earlier this month.
The SPP provided eligible shareholders with an opportunity to apply for up to A$30,000 worth of new fully paid ordinary shares at the same price of A$0.11 per share as its recently completed A$22 million placement.
Poseidon Nickel launched the SPP to raise A$3 million, however, following overwhelming support from investors it was oversubscribed.
Overall, the company received applications totalling approximately A$13.5 million and has decided to accept a total of A$6 million in applications.
“Continued and strong support”
Poseidon’s managing director Peter Harold said: “We would like to thank those shareholders who participated in the share purchase plan for their continued and strong support.
“We acknowledge that shareholders who subscribed may be disappointed by the scale back.
“Ultimately, balancing the strong SPP applications with the foreseeable capital needs of the business is in the best interests of all shareholders.”
Funds to support nickel strategy
Funds raised will support the company’s strategy to build a high-grade nickel inventory at its Black Swan project and progress the project toward a potential recommencement of operations in 2022.
Harold said: “The funds raised will be used to continue exploration activities at Golden Swan and across the Southern Terrace, undertake drilling to convert additional Silver Swan mineral resources to ore reserves, further test for extensions to the known Silver Swan mineralisation and complete mining and production studies at Black Swan.
“Funds will also be allocated to reviewing the exploration potential of our Lake Johnston and Windarra nickel projects.”
Issue and allotment of SPP shares
Following the oversubscription, Poseidon’s board exercised its discretion to accept a total of A$6 million in applications to issue approximately 54.5 million new shares under the SPP.
The company is likely to finalise the issue and allotment of new shares on Wednesday, September 1, 2021.
Poseidon will conduct a scale-back of applications, on a pro-rata basis, based on amounts applied for under the SPP, rounded up to reflect a whole number of new shares to A$6 million.
Excess funds as a result of the scale-back, overpayments and any application funds received after the closing date of August 25, 2021, will be returned to applicants without interest and will be processed by the company’s registry as soon as possible.