Marvel Gold Ltd (ASX:MVL) will undertake a non-renounceable pro-rata entitlement offer to eligible shareholders on the basis of one fully paid ordinary share for every five fully paid ordinary shares held at an issue price of $0.045 to raise up to approximately $5.2 million (before costs).
The issue price represents a 4% discount to the 5-day volume weighted average price (VWAP) and a 7.7% discount to the 10-day VWAP for shares in the company last traded on the Australian Securities Exchange on March 4, 2022.
Existing major shareholders, including Capital DI Limited and Deutsche Baloton Group have committed to apply for a total of $2.1 million of new shares, which includes both their entitlement and any shortfall shares.
Offer is non-renounceable
The entitlement offer will be available to all holders of shares in the company with a registered address in Australia, New Zealand, United Kingdom, Germany, Hong Kong, Singapore and Mauritius who hold shares in the capital of the company as at 5pm (AWST) on March 10, 2022.
The right to subscribe for the new shares under this offer will be non-renounceable meaning entitlements cannot be traded and are not otherwise transferable and the offer will not be underwritten.
Eligible shareholders who take up all of their rights under the offer will also be afforded the opportunity to apply for additional new shares in excess of their entitlement to the extent there is any shortfall under the offer.
Use of proceeds
Proceeds from the offer will be used to complete the current aircore and auger drilling programs at the Tabakorole Gold Project in Mali.
A large number of assays from the ongoing auger and aircore drilling programs at Tabakorole are outstanding and future work is dependent on these results.
The company also anticipates carrying out initial reconnaissance auger drilling campaigns at Kolondieba and Yanfolila, also in southern Mali.
Distribution options for EV1 shares
Meanwhile, Marvel Gold continues to investigate in specie distribution as a way of realising the value of the Evolution Energy Minerals Ltd (ASX:EV1) escrow shares for Marvel shareholders.
An in specie distribution would require a waiver from the ASX and there can be no assurance that the ASX waiver will be granted or that the In specie distribution will take place prior to expiry of the escrow period.
Escrow shares
Marvel Gold was issued 50 million shares in Evolution Energy Minerals, representing an approximate 31% stake in the company, as part of the spin-out and initial public offer (IPO) of EV1.
The escrow shares are subject to ASX-imposed escrow to November 16, 2023, pursuant to a restriction deed executed by Marvel and Evolution in advance of the IPO.
The Evolution IPO prospectus and Marvel announcements have outlined Marvel's intention to transfer all of the escrow shares to its shareholders by way of a pro-rata in specie distribution, subject to various conditions, including securing Marvel shareholder approval and regulatory approval.
Spin-off
Marvel Gold divested its Chilalo Graphite Project asset in Tanzania in November 2021 to spin-off vehicle Evolution Energy.
This was the launchpad for EV1’s A$22 million IPO, which saw the participation of prominent investment fund, ARCH Sustainable Resources Fund LP, which has a strong environment, social and governance (ESG) focus.