Ora Banda Mining Ltd (ASX:OBM) (OTCMKTS:ESGFF) (FRA:M6N) is preparing to raise $4 million via a share purchase plan (SPP) to support resource definition and regional exploration at its Davyhurst Project in Western Australia.
The ASX-lister opened the purchase plan to eligible shareholders this morning, offering new shares at 17 cents each.
Ora Banda has reserved the right to scale back applications if the SPP is oversubscribed, setting the $4 million price target so all eligible shareholders have the chance to subscribe for new company stock.
An opportunity for retail investors
Commenting on the share purchase plan, Ora Banda non-executive chairman Peter Mansell said he was pleased to offer investors the opportunity to take part in the raise following a recent institutional placement that raised $21 million.
“The placement and SPP proceeds, together with the company’s existing cash balance, will be used to fund resource definition and reserve replacement, maiden reserves work, regional exploration, ramp-up costs and working capital for the company’s Davyhurst Gold Project.
“On behalf of the Board of OBM, I invite you to consider participation in the SPP and thank you for your continued support of the company.”
Raise timetable
To facilitate the $4 million raise, Ora Banda has established an indicative timeline that details the share purchase plan’s next steps.
Prospective investors have until close of business on Wednesday, June 30, to participate in the SPP, with the option to subscribe for as much as $30,000 worth of new shares.
Then, Ora Banda will announce the results of the share purchase plan to the market on or before Monday, July 5.
New shares will then be issued on Friday, July 9 and commence trading on the ASX by the following Monday.
$21 million placement
Ora Banda’s upcoming SPP comes directly after the company executed a $21 million placement, issuing around 124 million new shares, also priced at 17 cents.
Both professional and sophisticated investors took part in the capital raise, with new institutional participants from Australia and overseas introduced to Ora Banda’s register.
Ora Banda managing director David Quinlivan said: “We are very pleased with the support the placement received and welcome a number of highly credentialed Australian and offshore investors to the register. On behalf of the Board, I would also like to thank our existing shareholders for their strong support.
”Funding to progress resource and reserve definition and advance high priority exploration targets ahead of when previously planned will further underpin the Company’s long-term future.”
Activity at Davyhurst
Ora Banda’s latest fundraise will support continued work at the Davyhurst gold operation after the ASX-lister achieved its first gold pour earlier this year.
The company has targeted resource development activities at five advanced project areas; the Riverina, Waihi, Siberia, Callion and Golden Eagle targets.
Work across these areas has cumulated in a definitive feasibility study, released in June last year, which outlined an initial 5.2-year mine life producing an average 81,000 ounces of gold per annum.
With fresh capital in tow, Ora Banda can continue to evolve the resources at Davyhurst and accelerate the broader operation towards production.