Australian Potash Ltd (ASX:APC) is raising $12 million through a two-tranche placement at an issue price of $0.08 per share, intended to bolster financials as the company advances its core Lake Wells Sulphate of Potash (SOP) Project in WA.
The company has already received firm commitments and the placement shares will rank equally with APC’s existing fully paid ordinary shares on issue.
Tranche one will consist of 97,488,039 shares expected to be issued on Tuesday, November 9, 2021, and the second tranche will consist of 52,511,961 shares that will be issued subject to, and conditional upon, shareholder approval at the company's annual general meeting on Wednesday, December 15, 2021.
A share purchase plan (SPP) will also be offered to existing shareholders to raise up to a further $2 million, subject to shareholder approval.
To advance continued development
“Funds raised from this placement and SPP will allow APC to continue to develop and de-risk the Lake Wells SOP Project over the coming months,” Australian Potash managing director Matt Shackleton said.
“Our progressive de-risking strategy, when applied to the mineral resource, is to continue developing bores, pump-testing those bores and then reconciling recorded flow rates back to the hydro-model, which is effectively our mine development plan.
“At this point, our schedule indicates we will have approximately 30%- 50% of the production borefield by volume developed through Q1 2022.
“Corporately we remain focused on finalising credit approval processes for the balance of the syndicated, development debt facility. I look forward to updating shareholders on progress at the LSOP presently.”
The offer price represents a 30.4% discount to the closing share price of $0.115 on Thursday, October 28, 2021, being the last day the company’s shares were traded prior to this announcement, and a 27.3% discount to the 20-day volume weighted average price of $0.110.
Proceeds from the offer, together with existing cash, will be used to continue to advance the Lake Wells SOP Project through to a Final Investment Decision (FID) targeted for the end of Q1 2022.
Share purchase plan
In addition to the placement, the company intends to conduct a share purchase plan (SPP) to raise up to $2.0 million.
Eligible APC shareholders as of 5.00pm AWST on Monday, November 1, 2021, with a registered address in Australia or New Zealand will be offered the opportunity to apply for up to $30,000 worth of new shares (subject to scale back at the company’s absolute discretion) at the same price as those shares issued under the placement, being $0.08.
The issue of the SPP shares will be subject to shareholder approval being received at the company’s AGM expected to be held on Wednesday, December 15, 2021.
