Andromeda Metals Ltd has raised $5 million in an oversubscribed placement, supporting its bid to fast-track early works on its flagship Great White Project and accelerate its high-purity alumina (HPA) initiative.
The placement, priced at $0.013 per share, represents a 23.5% discount to Andromeda’s previous closing price of $0.017 on May 7. A total of 384.6 million new fully paid ordinary shares will be issued to the institutional and sophisticated investors, with settlement expected on May 19 and shares allotted on May 20.
The offer attracted significant demand from new institutional backers, with Andromeda scaling back applications due to oversubscription.
Attracting new investors
Andromeda plans to use the funds to advance Stage 1A+ of the Great White Project, including early engineering and plant design, as well as technical and legal work to support development funding. Proceeds will also support the completion of a scoping study for Andromeda’s HPA project and fund further product development and marketing, in addition to providing general working capital.
Placement participants will also receive three free-attaching options for every four shares subscribed, subject to shareholder approval. These options, which are valid for two years, will be exercisable at $0.0195 and represent up to $5.6 million in additional working capital.
Acting CEO Sarah Clarke said the placement’s success reflected growing investor interest based on positive developments in both its project funding process and HPA technology.
“The significant interest saw robust demand in this placement, demonstrating strong investor confidence in Andromeda’s future,” she said. “The funds raised from this capital raising will enable us to progress our Great White Project in anticipation of a final investment decision, including advanced plant design and early engineering works for Stage 1A+.”
The placement was jointly managed by Bell Potter and Canaccord Genuity, which will receive a 6% fee on funds raised and 5 million options on the same terms as the investor-issued options.
Upon completion of the placement, Andromeda’s issued capital will increase to 2.3 billion shares, with an expanded options pool pending shareholder approval.
Dual-track strategy
The capital raise builds on a string of recent positive announcements from Andromeda, including its breakthrough in HPA technology, which significantly boosts the potential value of its kaolin resources in South Australia.
Read more: Andromeda Metals achieves 4N HPA breakthrough using novel, low-carbon process
The Stage 1A+ plan for the Great White Project is aimed at optimizing early cash flow while laying the groundwork for further expansion phases. In parallel, the HPA opportunity represents a value-accretive diversification strategy targeting high-grade growth markets like lithium-ion batteries and LEDs.
With new funding in hand and increased institutional interest, Andromeda appears to be on firmer footing as it moves toward a final investment decision and delivers on its dual-track development strategy.
“The strong support for this placement and the increased investor participation leave Andromeda well placed to advance the Stage 1A+ project to a final investment decision while also progressing development of the HPA opportunity,” Clarke said.