Tempest Raises $1.47M via Rights Issue at $0.004 per Share with Free Options
Tempest Minerals Limited has announced a non-renounceable rights issue to raise approximately $1.47 million, aimed at funding exploration at its Yalgoo iron ore project and other assets. The offer includes free-attaching options and carries a potential dilution of up to 33% for non-participating shareholders.
- Non-renounceable rights issue at $0.004 per share
- Approximately 367 million new shares to be issued
- Free-attaching options exercisable at $0.01 expiring May 2027
- Funds to accelerate Yalgoo iron ore and gold exploration
- Potential dilution of up to 33.33% for non-participating shareholders
Overview of the Capital Raising
Tempest Minerals Limited (ASX: TEM), an Australian mineral exploration company, has launched a non-renounceable pro-rata entitlement offer to raise approximately $1.47 million. Eligible shareholders can subscribe for one new share for every two shares held at an issue price of $0.004 per share. Alongside the new shares, the company will issue free-attaching options exercisable at $0.01 each, expiring on 31 May 2027, on the basis of one option for every four new shares issued.
The offer is open exclusively to shareholders registered in Australia and New Zealand as of the record date, 14 May 2025, and excludes US persons. The rights issue is not underwritten but is managed by Cygnet Capital Pty Limited, which also holds a mandate to place any shortfall shares.
Strategic Use of Funds
The proceeds from the entitlement offer will primarily fund accelerated exploration activities at Tempest’s flagship Yalgoo project in Western Australia. This project includes the recently discovered Remorse Magnetite Deposit, which boasts an inaugural inferred mineral resource estimate of 63.5 million tonnes at 30.6% iron. The funds will also support ongoing gold exploration and other project-related costs, as well as cover the costs associated with the entitlement offer itself and provide working capital.
Yalgoo is strategically located near several world-class mining operations, and the company is advancing metallurgical testing and development studies, including a memorandum of understanding with a green steel developer in Western Australia. The capital raise aims to underpin these efforts and unlock further value from the extensive 2,000 square kilometre portfolio of exploration assets held by Tempest.
Impact on Shareholders and Capital Structure
Assuming full subscription, the rights issue will increase the number of ordinary shares on issue by approximately 367 million, bringing the total shares outstanding to over 1.1 billion. The accompanying options will increase the total options on issue to around 142 million. The issue price represents a modest discount of 7.41% to the 15-day volume-weighted average price prior to the announcement.
Shareholders who do not participate in the offer risk dilution of up to 33.33%. The entitlement offer is non-renounceable, meaning rights cannot be traded or transferred, and any shortfall shares not taken up by eligible shareholders may be placed to new investors at the directors’ discretion, subject to regulatory limits on ownership thresholds.
Governance and Risk Considerations
The company’s board, led by Non-Executive Chair Brian Moller and Managing Director Don Smith, has committed to fully participate in the entitlement offer. The board comprises experienced professionals with backgrounds in mining, finance, and corporate governance.
Tempest has provided a comprehensive risk disclosure, highlighting exploration risks, regulatory and environmental compliance, native title issues, and the speculative nature of mineral exploration investments. The company also notes potential dilution risks and the absence of guarantees regarding dividends or share price appreciation.
Next Steps and Timetable
The entitlement offer opens on 19 May 2025 and closes on 3 June 2025, with new shares and options expected to be issued on 11 June 2025 and commence trading on the ASX on 12 June 2025. Eligible shareholders will receive personalised acceptance forms detailing their entitlements.
Investors are advised to carefully review the prospectus and consider the risks before participating. The company encourages shareholders to consult professional advisers if in doubt.
Bottom Line?
Tempest’s capital raise sets the stage for intensified exploration at Yalgoo, but shareholders must weigh dilution risks against potential resource upside.
Questions in the middle?
- Will the entitlement offer achieve full subscription given it is not underwritten?
- How will the market value the unlisted options attached to the new shares?
- What progress and results can be expected from the Yalgoo project exploration in the coming year?