Sovereign Metals Limited (ASX:SVM) has completed a bookbuild and secured investor commitments for 66.7 million new ordinary shares to raise gross proceeds of $4.3 million.
In addition to the placement, the company intends to raise up to an additional $1 million through a share purchase plan (SPP) for eligible shareholders.
Proceeds will be used to expedite development of the company’s Malingunde Flake Graphite Project in Malawi.
Emerging rutile potential
Sovereign’s managing director Julian Stephens said: “We are pleased with the strong support for this placement from overseas and domestic investors.
“It reflects the quality of the Malingunde Flake Graphite Project and the emerging significant rutile potential recently identified.
“The funds will allow Sovereign to accelerate the graphite DFS and advance the rutile potential.”
Directors to participate
The issue price for the placements and SPP of 6.5 cents represents an 11% discount to the 30-day ASX VWAP and a 17% discount to the 5-day ASX VWAP.
Directors of the company intend to subscribe for a total of 7 million shares in the placement, subject to shareholder approvals.
These include 5 million shares by chairman Ian Middlemas, 1.6 million by non-executive director Mark Pearce and 400,000 by managing director Julian Stephens.
READ: Sovereign Metals receives high-grade rutile results from Malingunde in Malawi
The company received high-grade rutile results from the Malingunde project after 2018 laboratory test work confirmed the potential to develop saprolite material.
There were 26 holes, or 21%, with a weighted average grade of 2.34% titanium oxide and 96 holes, or 78%, with a weighted average grade of 1.89%.
- Jessica Cummins