Emmerson Resources Ltd (ASX:ERM) has tapped investors to raise $6.5 million for copper-gold exploration across two of Australia’s most iconic mineralised regions.
The precious and base metals explorer is conducting a $5 million placement and a share purchase plan (SPP) to raise up to $1.5 million, with securities priced at $0.115 a pop.
Emmerson says the raise will keep its cash reserves holding strong against market volatility and ensures it’s fully funded to complete exploration programs.
Primarily, the resources stock will accelerate exploration in two of Australia’s foremost copper and gold hotspots — Tennant Creek in the NT and the Macquarie Arc in NSW — where it holds large land positions.
“Appetite for high-quality portfolio”
Speaking to the raise, Emmerson managing director Rob Bills said: “This new funding places Emmerson in a strong position to advance our projects in the Tennant Creek Mineral Field and the highly prospective Macquarie Arc of NSW.
“We are excited to continue drilling at Hermitage, where we returned our strongest-ever copper drill result.
“We are also preparing to drill Kiola, our most advanced project in NSW, which shares many characteristics of the Cadia-Ridgeway and Boda projects.
“We welcome some new institutional investors to the register and thank existing shareholders for their continued support.
“The strongly supported placement reflects investor appetite for Emmerson’s high-quality portfolio of copper, gold and cobalt opportunities and removes any future uncertainty around funding for our planned work.
“We believe Emmerson is well-positioned in having significant ground positions across some of Australia’s foremost exploration hotspots, with Tennant Creek being one of Australia’s highest-grade gold provinces and the Macquarie Arc in NSW, home of some of the largest copper-gold projects.”
Raise proceeds
Emmerson will use its cash injection to:
- Complete a 10-hole, 2,000-metre reverse circulation and diamond drill program at Hermitage, which is currently underway;
- Embark on a first phase diamond drilling program at the nearby Jasper Hills copper-gold-cobalt project, subject to successful negotiation and land access agreements with various stakeholders;
- Fly additional high-resolution magnetic drone geophysics to pinpoint new exploration targets, particularly around the high-grade Edna Beryl gold mine in Tennant Creek;
- Complete phase one RC and diamond drilling at Kiola in NSW in the second half of 2022, testing several compelling geophysical and geological targets derived from a recent 3D model of the subsurface;
- Undertake further early-stage exploration across the Fifield, Wellington and greater Kadungle projects in NSW ahead of defining drill targets; and
- Assess further business development opportunities to capitalise on its strategic landholding and emerging royalty business.
The fine print
The placement and SPP price represents an 11.4% discount to the 30-day calendar volume-weighted average price of Emmerson shares to April 11, 2022.
Under the placement, Emmerson plans to issue nearly 43.5 million new shares to institutional and sophisticated investors, raising $5 million before costs.
Shares are expected to settle on or around April 26.
Meanwhile, eligible shareholders can secure up to $30,000 worth of ERM shares in the SPP, which will issue up to 13 million new shares.
The SPP is not underwritten, and it’s expected to open on April 27 and close on May 16.
Bell Potter and Euroz acted as joint lead managers to the placement, and they’ll each receive 5 million unlisted options as thanks for their services.
These options will be issued within a fortnight of the placement’s completion, and can be exercised as below:
- 3 million options can be exercised at a 20% premium to the issue price ($0.138) before April 26, 2023;
- 3 million options can be exercised at a 50% premium to the issue price ($0.1725) before April 26, 2024; and
- 4 million options can be exercised at a 60% premium to the issue price ($0.184) before April 26, 2025.