04/04/2019 - 14:23

Capricorn to raise $10.1m

04/04/2019 - 14:23

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Gold aspirant Capricorn Metals has announced a $10.1 million rights issue, while the company assess sale options, including being acquired.

Capricorn to raise $10.1m
The funds are set to go towards advancing exploration at Capricorn's flagship Karlawinda gold project.

Gold aspirant Capricorn Metals has announced a $10.1 million rights issue, while the company assess sale options, including being acquired.

Under the offer, the shares will be issued at a price of 6.5 cents each, which represents a 19.5 per cent discount to the five-day volume-weighted average market price of Capricorn shares.

The funds are set to go towards advancing exploration at its flagship Karlawinda gold project, located 70 kilometres south-east of Newman.

In December, Capricorn said it had signed an offer from Macquarie Bank for a $107 million debt facility for its Karlawinda gold project.

In June, Capricorn flagged a reduction in the capital cost of the project to $132 million, following an optimisation study.

Capricorn non-executive chairman Doug Jendry said the equity raising represented another major milestone for Capricorn.

“This equity raising allows Capricorn to maintain exploration momentum at our Karlawinda Gold project and to strengthen the balance sheet,” he said.

“We are also delighted to have the ability to provide existing shareholders the opportunity to invest further in Capricorn at this exciting time.”

On Tuesday, Capricorn said it had rejected an $86 million unsolicited non-binding indicative and incomplete letter of intent from Emerald Resources and Hawke’s Point Holdings.

The offer valued Capricorn at 11 cents each, a 55 per cent premium to its closing price on Monday of 7.1 cents each.

Hawke’s Point is major shareholder in Capricorn that voted against Regis Resources’ $85 million all-scrip takeover offer for Capricorn in October last year.

Capricorn said a number of companies had expressed interest in accessing a virtual data room of its confidential information, and intends to re-open the data room upon successful completion of the rights issue.

It said it would run a formal process to seek expressions of interest from other parties that may want to purchase its Karlwinda gold project in full or form a joint venture, or acquire Capricorn as a whole. 

Argonaut will fully underwrite the rights issue announced today, and has entered into pre-commitment letters with two existing shareholders – Nero Resource Fund and Neon Capital.

In a statement, Capricorn said it was expected that Nero and Neon would sub-underwrite the rights issue for up to $4 million each.

Last month, Capricorn managing director Warren Hallam and chief financial officer Johnathan Shellabear resigned after Neon and Nero successfully ousted three of Capricorn’s directors after calling a shareholder meeting.

Neon Capital and Nero Resource Fund, which collectively own around 5.5 per cent of Capricorn, pushed out chairwoman Debra Bakker and non-executive directors Geoff Rogers and Peter Benjamin.

Stuart Pether was the only non-executive director who avoided the board spill. 

Neon and Nero nominated Tim Kestell, Douglas Jendry and Peter Pynes to be appointed in their place.

Mr Kestell and Mr Jendry were appointed to the board by shareholder vote.

Mr Hallam was appointed as managing director in February, and the company has not yet tapped his permanent replacement.

Shares in Capricorn last traded yesterday at 8.4 cents each.

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