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Davenport Resources completes transformational A$10 million share placement to advance German potash projects

Last updated: 00:10 27 Nov 2020 GMT, First published: 00:07 27 Nov 2020 GMT

Davenport Resources Ltd completes transformational $10 million share placement to advance German Potash Projects
The funds raised will allow the company to move forward with a confirmatory drilling program at the Ohmgebirge project

Davenport Resources Ltd (ASX:DAV) (FRA:D86) has completed a transformational A$10 million placement, putting it in a strong financial position to advance its portfolio of four standalone projects in the South Harz region of Germany with a combined 5.3 billion tonnes of potash resource, the largest potash resource in western Europe. 

The company has received firm commitments for the placement at an issue price of A$0.045 per share from a range of sophisticated and institutional investors, including existing shareholders, directors and new investors. 

"Overwhelmingly successful"

Davenport chief executive officer Dr Chris Gilchrist said: “This capital raising is transformational for Davenport and we are delighted that this ambitious raising, representing the top end of the directors’ target of A$8-10 million, has been so overwhelmingly successful.

“Through the support of existing shareholders and the high level of interest shown by new sophisticated and institutional investors, we can now look forward to an exciting journey leading to the most significant work program we have undertaken to date to upgrade our resources at Ohmgebirge next year, the release of our compelling scoping study and the initiation of a definitive feasibility study for the project.

“We have mapped out in detail the tasks ahead and we look forward to announcing our progress over the coming months.”

Placement details

The company will issue 222,388,897 new fully paid ordinary shares at an issue price of A$0.045 per share in two tranches.

Participants in the placement will also be issued with one unlisted option for every two shares subscribed for in the placement exercisable at A$0.08 and expiring two years from their date of issue.

The first tranche will see the issue of 16,666,668 shares pursuant to its ASX Listing Rule 7.1A capacity and 8,333,334 options pursuant to its ASX Listing Rule 7.1 capacity to raise A$750,000.

In the second tranche, which is subject to shareholder approval at a meeting to be held in early January 2021, Davenport will issue a further 205,722,229 new shares and 102,111,114 options to raise around A$9.25 million.

The directors have agreed to subscribe for a total of 15,722,221 shares and 7,111,111 options as part of Tranche 2, subject to shareholder approval.

Tranche 1 shares will be issued on or around December 4, 2020, with Tranche 2 shares expected to be issued in mid-January 2021.

Euroz Hartleys Ltd in Perth and Cenkos Securities PLC (LON:CNKS) in London acted as joint lead managers.

Use of funds

The funds raised will allow the company to move forward with a confirmatory drilling program at the first of the projects, Ohmgebirge, to upgrade the classification of the 325 million tonnes at 13.14% potassium oxide for 43 million tonnes of potassium oxide resource from the inferred category to measured and indicated and facilitate the release of its encouraging economic study.

Work will also commence on Ohmgebirge’s definitive feasibility study, with the balance of funds raised to be used for working capital purposes.

South Harz Potash Ltd uncovers more potash than expected

Dr Chris Gilchrist speaks to Proactive London with regards to progress on its current projects.  South Harz completed, successfully, the first of two confirmatory drill holes in the first quarter of the year, finding 11 metres of potash which was double previous expectations.  It also...

on 10/5/22