Proceeds from the Sovereign Metals placement will be used to expedite development of the company’s 100% owned
Malingunde flake graphite project in Malawi, including all technical works, enabling completion of the pre-feasibility and definitive feasibility studies.
The chairman of Sovereign Metals has also agreed to subscribe for a total of 2 million shares in the placement, subject to the necessary approvals.
The issue price of A$0.11 represents a 15% discount to the last closing price of $0.13 on ASX and to the 10-day ASX VWAP.
“We are delighted to have raised funds to complete all technical disciplines required to proceed to a final investment decision at Malingunde,” comments Sovereign Metals MD, Dr Julian Stephens.
“The significant institutional support received from Australia and the United States highlights the demand for
simple, low-cost projects in the rapidly expanding graphite space.”
Sovereign Metals will place up to 59 090 909 ordinary shares at $0.11 each to institutional and sophisticated investors, to raise $6.5 million before costs.
The placement will be completed in two tranches:
Tranche 1 shares: 38 956 189 new ordinary shares at $0.11 each to raise approximately $4.3 million before costs under the company’s capacity under Listing Rules 7.1 (17 223 281 shares) and 7.1A (21 732 908 shares).
Following the issue of these shares and unlisted options, Stephens will have no remaining issue capacity under Listing Rule 7.1 and Listing Rule 7.1A; and
Tranche 2 shares: 20 134 720 new ordinary shares at $0.11 each to raise approximately $2.2 million before costs.
Sovereign Metals expects to complete Tranche 1 of the placement on or about 2 November 2017.
Feature image credit: Sovereign Metals