Andromeda Metals Ltd has successfully completed a $5 million placement to institutional and sophisticated investors, reinforcing its push towards a final investment decision (FID) at its flagship Great White Project in South Australia.
The shares were issued at $0.013 each, with investors also offered three free-attaching options for every four shares subscribed – exercisable at $0.0195 and expiring two years after issue, pending shareholder approval. If all options are exercised, Andromeda could raise another $5.6 million in working capital.
Progressing towards FID
The funds will help advance the Great White Project through early works, finalise plant design, and support legal, technical and financial processes underpinning project financing. A portion will also progress a scoping study for a high-purity alumina (HPA) project and fund general working capital.
Andromeda is now well funded with a post-raise cash position of about $9.5 million, allowing it to progress towards an FID, MST Access senior analyst Michael Bentley noted. The company remains in exclusive debt funding negotiations with Merricks Capital for a facility of up to $75 million, compared with a total capital requirement of $90 million for Stage 1A+.
Bentley says the project is largely de-risked, with most long-lead items procured, key approvals in place and binding offtake agreements covering initial production.
“Final project funding is the key catalyst for a material re-rating,” he said, valuing the company at 13 cents per share, well above its current price of about $0.011 per share.
“We also believe that a cornerstone investor may well pay a premium to the current share price to take a significant share of the company,” Bentley added.
Long-term opportunity
Andromeda has also flagged promising test work for producing HPA from Great White kaolin, achieving 99.9985% purity – just shy of premium 5N grade. MST sees the HPA pathway as a longer-term opportunity with strong strategic value, given growing demand in batteries, semiconductors and LED markets.
“The project’s location in South Australia close to port and other key infrastructure, as well as the simple, shallow nature of the deposit and conventional processing, are all notable tailwinds for the project,” Bentley said.
With the equity raise now finalised and debt talks progressing, Andromeda appears to be entering the home stretch towards a long-awaited FID and potential project build.
“The only remaining hurdle is securing funding for the Stage 1 development,” as Bentley said – a milestone investors will be watching closely ahead of the Merricks exclusivity deadline of July 31.