Magmatic Resources Ltd (ASX:MAG) has bolstered its war chest for exploration in the prolific Lachlan Fold Belt of Central West New South Wales on receiving firm commitments for a placement to raise approximately A$3.0 million.
The placement at A$0.085 per new fully paid ordinary share was strongly supported by existing and new domestic and offshore institutional and sophisticated investors.
FMG participates
Significantly, existing 19.9% shareholder FMG Resources Pty Ltd, a wholly-owned subsidiary of Fortescue Metals Group, has committed to subscribe for new shares in the placement to maintain its existing shareholding.
Magmatic Resources’ managing director Dr Adam McKinnon said: “We have been pleased to see the strong support of our recent placement by Australian and international institutions along with sophisticated investors and our largest shareholder FMG Resources Pty Ltd.”
Use of funds
Funds raised will be used to accelerate gold and copper exploration at the company’s NSW portfolio of exploration assets including the Wellington North Project and the Parkes Project, and for general working capital.
This work will occur in parallel with the farm-in and joint venture in operation at the company’s Myall Project, with Fortescue spending up to $14 million over six years to earn a 75% interest.
“In a great position”
"Magmatic now finds itself in a great position to target its next major copper-gold discovery through accelerated exploration efforts at Wellington North and Parkes,” McKinnon said.
"With upcoming drilling at both prospects and a parallel program of works at Myall to be funded by FMG Resources, I am very much looking forward to a very busy, discovery-focused second half to 2024.”
Placement details
Magmatic will issue approximately 35.4 million new shares at an issue price of A$0.085 per share to raise approximately A$3 million.
The issue price represents:
- a 15% discount to the last closing price of the company’s shares on May 15, 2024, of A$0.100 per share; and
- a 13.3% discount to the 5-day VWAP of $0.098 up to an including May 15, 2024.
New shares in the placement will be issued under the company’s existing capacity pursuant to ASX Listing Rule 7.1.
Settlement of new shares is expected to occur on Friday, May 24, 2024, with these shares to rank equally with existing shares in the company.
Canaccord Genuity (TSX:CF, LSE:CF) (Australia) Limited acted as lead manager and bookrunner to the placement.