PNX Metals Ltd (ASX:PNX) (FRA:4P1) is undertaking a capital raising exercise comprising a placement and rights issue to raise up to $6.67 million to advance its exploration and development strategy focused on gold and zinc-gold-silver projects in the Northern Territory.
It has received firm commitments for a placement to eligible professional and sophisticated investors, including substantial shareholder Delphi Unternehmensberatung Aktiengesellschaft, of 378,333,333 fully-paid ordinary shares at an issue price of 0.6 cents per share to raise about $2.27 million before costs.
PNX Metals is also offering eligible shareholders the opportunity to acquire new shares at the same price as the placement, through a one-for-four non-renounceable pro-rata rights issue to raise up to $4.4 million before costs and expenses.
Strong endorsement of projects
PNX managing director James Fox said: “This support for the company through a placement and rights issue is a strong endorsement of the quality of PNX’s Northern Territory exploration and development assets that include the 100%-owned Fountain Head gold and Hayes Creek zinc-gold-silver projects.
“This funding will see the company through a significant period of project development and gold exploration activity over the next 12 months, whilst allowing for flexibility to assess and potentially acquire any ‘bolt-on’ assets identified in the region.
“Exploration will be rapidly advanced and will include drill testing newly identified target areas that lie within a three-kilometre radius of Fountain Head that have the potential to add materially to the existing gold resource base.
“We look forward to delivering on the potential for the projects to create significant value for the company’s shareholders.”
Offer details
The issue price of 0.6 cents under the offer represents an around 30.69% discount to the volume-weighted average market price of PNX shares for the five trading days prior to November 26, 2020, and a discount of around 25% to its last closing price of 0.8 cents on November 25, 2020.
Following the issue of the 378,333,333 shares relating to the placement, the maximum number of new shares to be issued under the rights issue is 730,238,702.
The shareholder’s right to subscribe for new shares under the rights issue is not transferable.
Use of funds
The significant support shown by existing key shareholders and new investors is an endorsement of the Fountain Head project and the company’s exploration and development strategy and will facilitate de-risking of the next stage of project development.
Proceeds will be used to accelerate activities at the 100%-owned Fountain Head and Hayes Creek projects, including feasibility work and government and environmental approvals submission.
Near-mine and regional gold exploration will also re-commence to test new exploration targets with the potential to host additional gold resources, identified during a recent geological review of the company’s exploration portfolio also about 170 kilometres south of Darwin in the Pine Creek region of the Northern Territory.
New board appointment
PNX Metals also announced the appointment of Hansjörg Plaggemars as non-executive director with effect from November 28, 2020, and the resignation of David Hillier as non-executive director effective November 26, 2020.
The changes follow an ongoing review of the company’s board structure designed to ensure board skills are aligned with its strategic direction and in consultation with the company’s major shareholders.
Plaggemars is an experienced company director with a strong background in corporate finance, corporate strategy, and governance, having served on the board of several listed and unlisted companies in a variety of industries including mining, agriculture, shipping, construction, and investments.
This includes Delphi Unternehmensberatung AG, the company’s major shareholder.
PNX Metals chairman Graham Ascough said: “On behalf of the board and management, I welcome Hansjörg to the board and given his wealth of experience and knowledge in the corporate finance sector I am confident that he will make a significant contribution to the future success of the company.”