Stellar Resources (ASX:SRZ) is undertaking a partially under-written non-renounceable entitlement offer to raise about $1.2 million to fund an optimisation drilling program the Heemskirk tin project in Tasmania.
The restart of exploration at the project comes at an opportune time in light of the Indonesian Government’s ban on exports of unprocessed nickel, bauxite and tin.
This offers Stellar the opportunity to meet growing demand as supplies become increasingly constrained.
The 1 for 12 shares are being offered at an issue price of $0.052 per share, representing a discount of 5.5% to the closing share price on Monday. The shares are priced similarly to those placed with Capetown SA in January when it raised $2.6 million via the placement of 50 million fully paid ordinary shares.
The entitlement offer is partially underwritten by Capetown SA and M. Elasser Vermögensverwaltung Wealth Management GmbH, with both of them agreeing to accept shortfall shares of up to a maximum of 84% of the issue.
The proceeds will be used for an optimisation drilling programme at the High grade Heemskirk Tin project and the drilling of the satellite St Dizier tin prospect and working capital.
Capetown, an experienced operator in the tin recycling industry, became Stellar’s largest shareholder with an 18.1% holding which is interesting as over the last forty years, the owners of Capetown SA built a global non-ferrous metal recycling business that included Metallo Chimique, the eighth largest supplier of tin in the world.
Now having sold the recycling business in 2013, the family decided to remain invested in tin through Capetown SA and its shareholding in Stellar which speaks volumes.
As Stellar's Heemskirk project, is the highest grade undeveloped tin deposit in Australia.
Indonesia's stated ban on exports of unprocessed tin is also likely to play well for development of Heemskirk.
Targets of March quarter include starting a 6 hole diamond drilling program at Lower Queen Hill and Upper Severn and resumption of metallurgical testing program at Heemskirk and resource estimate from computer model of historical data, 6 hole diamond drilling program and metallurgical testing for the St Dizier tin prospect.
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