KGL Resources Ltd (ASX:KGL) will raise around $24.2 million at $0.37 cents per share via an entitlement offer that is subject to a minimum raise condition of $9.9 million.
The company has announced a proposed one-for-six non-renounceable entitlement offer of fully paid ordinary shares and expects to release up to 65.39 million new shares.
The offer opens on Tuesday, April 26, and closes on Thursday, May 5, with new shares to be issued on Thursday, May 12.
While the offer is not underwritten, two of KGL’s major shareholders, KMP Investments and Denis Wood, intend to take up their full entitlement, which would provide $8.1 million in funding.
Use of funds
The company will use the money raised to advance its Jervois Copper Project.
KGL is focused on delineating and developing the high-grade resource at Jervois in the Northern Territory and establishing a world-class, low-cost copper mine.
The money will go towards:
- Front end engineering design (FEED);
- The final stages of the feasibility study; and
- Working capital, to strengthen the balance sheet as the company moves toward a final investment decision for the Jervois Copper Project.
KGL’s executive managing director, Simon Finnis, said, “The feasibility study is nearing completion, and while it has taken longer than initially expected it has allowed us to use an updated and improved resource as the basis of the mine plan and also incorporate into our plant design the requirements of the Glencore agreement. It is considered likely that this will improve the feasibility outcomes.
“Now the feasibility study is in its final stages, we need to maintain momentum on the project by completing this raise.
"If we achieve a good take up on this issue, we will be in a strong position to place orders for longlead items, commence early site works and de-risk the construction by locking in prices and timing of key equipment, based on the outcomes of the feasibility study.
“We think it is appropriate at this time to give the first opportunity to our ever-supportive shareholder base.
"Hence, we offer our shareholders the chance to participate in the anticipated upside that completion of the study and development of the project will deliver.”