Australian Potash Ltd (ASX:APC) has taken its recent capital raising proceeds to $12.477 million after completing a share purchase plan with the funds to further advance the flagship Lake Wells Sulphate of Potash (SOP) Project in WA.
SPP applications were received from eligible shareholders for a total of $477,000, representing 5,962,500 fully paid ordinary shares at $0.08 per share, the same issue price as the placement that raised $12 million.
It is anticipated that the funds will be primarily used to progress borefield development activities and associated earthworks at the Lake Wells Project, together with working capital.
READ: Australian Potash launches share purchase plan following $12 million placement
Complements placement
The SPP, which entitled each shareholder to purchase up to $30,000 worth of new shares and closed last week, complements APC’s two-tranche placement to sophisticated and institutional investors.
The first tranche of shares associated with the placement was issued on November 9, 2021, representing funds of $7.8 million.
Issue of the second tranche, representing funds of $4.2 million, is anticipated to occur on or around December 22, 2021, following shareholder approval received for their issue at the company’s annual general meeting on December 15, 2021.
The issue of the SPP shares to those eligible shareholders occurred on December 17, 2021. The price under the offer represented a discount of 36.6% to the VWAP price during the five trading days immediately prior to the announcement date of the SPP.
De-risking strategy
Regarding the capital raising, Australian Potash managing director Matt Shackleton said: “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.
“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.”