Talon Energy Ltd (ASX:TPD) has received firm commitments from institutional and sophisticated investors to raise $12 million through a well-supported placement at an issue price of $0.145 per share.
In addition to the placement, Talon will also offer eligible shareholders the opportunity to participate in a non-underwritten $2 million share purchase plan at the same issue price as the placement.
Proceeds from the capital raising will be used for:
- Talon’s share of the final development capital and operating costs for the Walyering Gas Project;
- Perth Basin exploration activities, including the farm-in expenditure of the recently acquired L7/EP437 permit; and
- General working capital and transaction costs.
High-quality exploration portfolio
Talon managing director Colby Hauser said: “Talon is pleased with the level of support received from new and existing shareholders for this Placement.
“This is an important Capital Raising which will fully fund Talon’s share of Walyering’s development capital and operating costs, and provide additional capital to further invest in our high-quality exploration portfolio over the next couple of years.
“Walyering is expected to be WA’s next onshore gas producer, and will be a low cost, low carbon intensity project that is well placed to meet WA’s growing industrial gas demand.
Placement summary
Despite Talon receiving credit approved debt terms from debt providers, the board has formed the view that equity funding provides the greatest opportunity and flexibility to grow value for shareholders.
Under the placement, Talon will issue 82,758,621 new shares at an issue price of $0.145 per share to raise the $12 million.
Meanwhile, the SPP is expected to open on March 14, 2023 and close at 5.00pm April 4, 2023, with the ability to accept oversubscriptions.
Canaccord Genuity (TSX:CF, LSE:CF) Australia and Bell Potter Securities Ltd acted as joint lead managers to the placement and Wilsons Corporate Finance acted as the co-manager to the placement.
Hauser adds: “Although we undertook an extensive debt funding process and received credit approved terms from providers, the Board has decided to undertake an equity raise as it provides the greatest certainty to fund and accelerate upcoming exploration commitments and more importantly offers the flexibility to utilise cashflows and explore various ways to grow value for Talon shareholders.
“The Board would like to thank our existing shareholders who have supported the Company, and we would like to welcome new investors who took part in the Placement.
“Talon has a number of near term value catalysts and we look forward to updating shareholders."