Ausmon Resources Limited has announced a Share Purchase Plan offering up to 300 million shares at a discounted price to raise $540,000, aiming to reduce borrowings and fund exploration activities.
- SPP offers up to 300 million shares at $0.0018 each
- Funds raised to reduce borrowings, pay accounts, and support exploration
- Shares priced at 8.6% discount to recent VWAP and 10% to last close
- Eligible shareholders can apply for up to $30,000 without brokerage fees
- Participants may receive Junior Minerals Exploration Incentive (JMEI) credits
Ausmon Resources' Capital Raise Strategy
Ausmon Resources Limited (ASX: AOA) has unveiled a Share Purchase Plan (SPP) designed to raise up to $540,000 by issuing up to 300 million fully paid ordinary shares at a price of $0.0018 each. This move comes as part of the company’s ongoing efforts to strengthen its balance sheet by reducing borrowings and accounts payable, while also securing funds for exploration and general working capital.
The offer price represents an 8.6% discount to the volume weighted average price (VWAP) over the last five trading days and a 10% discount to the last closing price prior to the announcement, providing an attractive entry point for eligible shareholders.
Shareholder Participation and Incentives
Eligible shareholders as of the record date, 17 February 2025, can apply for shares up to a value of $30,000 without incurring brokerage or transaction fees. The SPP is not underwritten, meaning the total amount raised depends on shareholder uptake. In cases of oversubscription, the company reserves the right to scale back applications on a pro-rata basis.
Importantly, Australian resident participants in the SPP may also benefit from the Junior Minerals Exploration Incentive (JMEI) credits. Ausmon has been allocated $600,000 in JMEI credits for the 2025 tax year, which can be distributed to shareholders proportionally based on the equity capital raised and eligible exploration expenditure. These credits can provide a refundable tax offset or franking credit, potentially reducing the effective cost base of the shares acquired.
Context and Market Implications
Ausmon’s decision to raise capital through an SPP rather than a fully underwritten placement signals a cautious but proactive approach to managing its financial position. The funds raised will help alleviate short-term liabilities and support ongoing exploration efforts, which are critical for junior mining companies seeking to advance their projects and attract further investment.
While past JMEI distributions have been notable, the company cautions that the 2025 credit distribution cannot be reliably forecasted due to uncertainties in exploration expenditure and capital raised. This injects an element of unpredictability for investors considering the tax benefits of participation.
The timetable for the SPP is tight, with the offer closing on 18 March 2025 and new shares expected to commence trading on 26 March 2025, subject to ASX confirmation. Shareholders will receive holding statements by 2 April 2025.
Overall, this capital raising initiative reflects Ausmon’s intent to maintain operational momentum while managing financial risks in a challenging market environment for junior explorers.
Bottom Line?
Ausmon’s SPP could be a pivotal step in stabilising its finances and advancing exploration, but uptake and JMEI outcomes remain key variables to watch.
Questions in the middle?
- Will the SPP reach its $540,000 target given it is not underwritten?
- How will the actual JMEI credit distribution for 2025 compare to previous years?
- What impact will the capital raise have on Ausmon’s share price and investor sentiment?