PNX Metals Ltd (ASX:PNX) is raising up to $4.4 million in a non-renounceable rights issue to advance its integrated zinc-gold-silver development strategy in the Northern Territory.
The company is offering eligible shareholders the opportunity to acquire new shares at $0.003 per share through one new share for every three existing shares.
Notably, the company has received firm commitments for up to $2.1 million, including from its substantial shareholder Delphi AG.
This significant ongoing support is a strong endorsement of the company’s aim to sequentially develop its 100%-owned Fountain Head gold and Hayes Creek zinc-gold-silver projects.
The funds raised will support ongoing development activities at these projects and continue near-mine and regional gold/base metals exploration.
Integrated project synergies
PNX managing director James Fox said: “We would like to thank existing shareholders for their continued support of the company and its ongoing exploration and development activities at the Fountain Head gold and Hayes Creek zinc-gold-silver projects.
“We look forward to continuing to increase the resource base through near-mine and regional exploration and updating development studies with the results of integrated project synergies, test-work and flowsheet optimisation.
“The pending approval of the Fountain Head EIS will be a significant milestone and clears the way forward to submit operational mine management plans and commence early site activities.
“Assessment of potential consolidation opportunities will continue where there is strong support for project financing, improved margins and scale potential.
“We look forward to continuing to de-risk the projects and delivering on the potential for the Fountain Head and Hayes Creek to create significant value for the company’s shareholders.”
Offer summary
The non-renounceable pro-rata rights issue for eligible shareholders will be undertaken on the basis of one new share for three existing shares held on the record date, at an issue price of $0.003 per share to raise approximately $4.4 million before costs and expenses.
The issue price of $0.003 under the offer represents an approximate 30.1% discount to the volume-weighted average market price of PNX shares for the five trading days prior to January 26, 2023.
This is a discount of about 25% to the company’s last closing price of $0.004 on January 25, 2023.
Use of funds
The proceeds of the offer will be utilised, but not be limited to the following:
- Mine management plans for the newly acquired Mt Porter & at Glencoe/ Fountain Head gold deposits;
- Hayes Creek environmental impact statement technical studies and project management;
- Integrated plant test-work, engineering & design, and updated feasibility;
- Tenement holding and management costs, near-mine/regional exploration;
- Finalising the Mt Porter acquisition; and
- Corporate costs, working capital & costs associated with the offer.