Savannah Goldfields Secures $2.69M in Placement and Institutional Entitlement Offer
Savannah Goldfields has successfully completed a $2.69 million capital raise through a placement and institutional entitlement offer, setting the stage for a retail offer and a broader $14 million funding program to restart gold mining operations.
- Placement of 79 million shares to cornerstone investor raises $1.19 million
- Institutional entitlement offer raises approximately $1.5 million
- Retail entitlement offer opens February 10, targeting $2.7 million
- Overall capital raising aims to secure $14 million for operations and growth
- Funds to support recommencement of mining at Agate Creek and Georgetown projects
Savannah Goldfields Advances Capital Raising
Savannah Goldfields Limited (ASX: SVG) has announced the successful completion of a key phase in its capital raising program, securing approximately $2.69 million through a placement and the institutional component of a fully underwritten entitlement offer. This milestone marks a significant step toward the company’s broader goal of raising around $14 million to strengthen its balance sheet and fund the restart of gold mining operations.
Placement and Institutional Offer Details
The placement involved issuing 79 million new shares at 1.5 cents each to W&E Maas Holdings Pty Ltd, an entity linked to cornerstone investor Wes Maas, raising about $1.19 million. Concurrently, the institutional entitlement offer, conducted on a 1-for-1 basis at the same price, attracted strong support from existing institutional shareholders, raising approximately $1.5 million through the issuance of around 100 million new shares. Notably, all eligible institutional shareholders fully subscribed, eliminating any shortfall.
Upcoming Retail Entitlement Offer
The retail component of the entitlement offer is scheduled to open on February 10, 2025, and aims to raise an additional $2.7 million. Eligible retail shareholders in Australia and New Zealand will be invited to participate at the same offer price and ratio. The offer includes an additional share facility, allowing shareholders to apply for shares beyond their entitlement, subject to board discretion and potential scale-back.
Broader Capital Raising Strategy
This successful phase is part of a comprehensive capital raising strategy that also includes a conditional placement of 300 million shares and a convertible note placement to the cornerstone investor, both subject to shareholder approval. Together, these initiatives aim to raise approximately $14 million to fund the recommencement of gold mining and processing at Savannah’s Agate Creek and Georgetown projects, as well as resource growth activities.
Market and Operational Implications
The capital raising is fully underwritten by Morgans Corporate Limited, providing a degree of certainty to the funding process. The successful institutional uptake signals confidence from key shareholders in Savannah’s operational plans and growth prospects. However, the retail offer’s success remains to be seen and will be critical in achieving the full funding target. The fresh capital injection is expected to enable Savannah to accelerate its mining activities, potentially unlocking value for shareholders as production resumes.
Bottom Line?
Savannah’s capital raise clears a major hurdle, but retail investor response will be pivotal for its $14 million funding ambition.
Questions in the middle?
- Will the retail entitlement offer meet its $2.7 million target amid current market conditions?
- How soon can Savannah realistically recommence gold production at Agate Creek and Georgetown?
- What impact will the convertible note placement have on shareholder dilution and future capital structure?
