Nelson Resources Ltd (ASX:NES) has launched a Renounceable Rights Issue to raise up to $2 million to fund the completion of current drilling programs and expand exploration at its Woodline and Tempest projects in WA.
Under the offer, shares will be are priced at 4.7 cents with shareholders offered two new shares for every seven existing shares held on July 26, 2021.
On completion, Nelson will be well-funded with up to $1.8 million available.
Discount to VWAP
The offer price represents a discount of 20% to the company’s 10-day volume-weighted average price (VWAP) of 5.9 cents and 31% to the company’s 90-day VWAP of 6.8 cents.
It will also include one attaching listed option, exercisable at 8 cents and expiring on August 31, 2023, for every two new shares subscribed.
As well as completing current drilling, Nelson intends to expand upon exploration programs at its Woodline and Tempest projects that sit on the boundary of the Albany Fraser Oregon and Yilgarn Craton.
The expanded programs will include additional drilling and geophysics programs to be conducted with the company’s wholly-owned drilling and geophysics equipment.
Open to all eligible shareholders
The issue is open to all eligible shareholders who have a registered address within Australia or New Zealand, and who hold shares on the record date.
This offer will close on August 10, 2021, unless extended, and eligible shareholders can apply for the shortfall in excess of their entitlement.
Furthermore, shareholders can also trade their rights and apply for additional shares and options from 23 July 2021.
Mahe Capital advised on the issue and acts as lead manager and underwriter with the issue partially underwritten to $1.5 million, subject to certain terminating events at the underwriter’s election.
Directors have shown their confidence in the company and will participate for their full entitlement and will sub-underwrite a portion of the shortfall.
To rank equally with existing shares
All new shares issued will rank equally with existing shares on issue and the company will apply for quotation of the new shares and options.
A prospectus in relation to the rights issue will be lodged with ASIC on July 21, 2021, and, together with a personalised entitlement acceptance form, will be sent to eligible shareholders shortly after the record date.
Eligible shareholders should consider the prospectus in deciding whether to acquire securities under the rights issue and will need to follow the instructions on the entitlement and acceptance form that will accompany the prospectus.