Theta Gold Mines Ltd (ASX:TGM) (OTCMKTS:TGMGF) has entered an At-The-Market (ATM) subscription agreement with Acuity Capital, providing up to A$15 million of standby equity capital with the expiry date set for July 23, 2023.
Under the ATM, Theta retains full control of all aspects of the subscription process: having sole discretion as to whether to utilise the ATM, the maximum number of shares to be issued, the minimum issue price of shares and the timing of each subscription (if any).
There are no requirements on the company to utilise the ATM and Theta may terminate the ATM at any time, without cost or penalty.
Acuity Capital and the ATM do not place any restrictions at any time on the company raising capital through other methods.
Shares placed to Acuity Capital
If the company utilises the ATM, it is able to set an issue price floor (at its sole discretion), with the final issue price being calculated as the greater of that floor price set by Theta and up to a 10% discount to a Volume Weighted Average Price (VWAP) over a period of the company’s choosing.
As security for the ATM, Theta has agreed to place 24 million Theta Gold shares from its Listing Rule 7.1 capacity, at nil cash consideration to Acuity Capital.
The company may, at any time cancel the ATM as well as buy back (and cancel) those shares for no cash consideration (subject to shareholder approval).
Funds to support open-pit development
Theta plans to use A$3.13 million raised in a placement to support the development of its starter open-pit gold projects in South Africa and will have the ATM as a back-up..
In the placement, TGM will issue 15,027,819 fully paid ordinary shares at A$0.275 per share with 11,391,455 of these forming a share placement to sophisticated and professional investors to raise A$3,132,650 before costs.
Funds raised will be used for project expenditure (open-pit and underground), including permitting, underground mine pre-feasibility study, reserve conversion, tailings infrastructure, as well as working capital, business development and corporate expenses.