Terrain Minerals Ltd has announced a pro-rata entitlement offer to raise up to $1.82 million, supported by partial underwriting from directors Justin Virgin and Jason MacDonald. The capital raise aims to fund key exploration activities at the Smokebush Project and other initiatives.
- Pro-rata non-renounceable entitlement offer at $0.003 per share
- Up to 607.7 million new shares and options to be issued
- Directors Justin Virgin and Jason MacDonald partially underwriting $115,000
- Funds targeted for Smokebush Project drilling and ongoing exploration
- Potential dilution of 21.28% for non-participating shareholders
Capital Raising Overview
Terrain Minerals Ltd (ASX: TMX) has launched a significant capital raising initiative through a pro-rata non-renounceable entitlement offer, aiming to raise approximately $1.82 million. Shareholders registered as of 16 May 2025 will be entitled to subscribe for one new share for every 3.7 shares held, priced at $0.003 each. Each new share subscribed will also come with one free-attaching new option exercisable at $0.005 before June 2027.
In addition to the entitlement offer, the company proposes to issue up to 245 million new options to participants in a recent placement, subject to shareholder approval. This combined approach is designed to bolster the company’s cash reserves to advance its exploration programs and working capital needs.
Director Underwriting and Shareholder Participation
Notably, the entitlement offer is partially underwritten by two of Terrain Minerals’ directors, Justin Virgin and Jason MacDonald, who have committed to underwriting $115,000 of the raise. This underwriting arrangement underscores the directors’ confidence in the company’s prospects and aligns their interests with those of existing shareholders.
Both directors hold substantial shareholdings and options in the company and have indicated their intention to fully participate in the entitlement offer. This involvement may reassure investors but also raises considerations around potential dilution and control changes depending on the uptake by other shareholders.
Use of Funds and Strategic Focus
The proceeds from the capital raising will primarily fund drilling activities at the company’s flagship Smokebush Project, focusing on the Lighting and Monza gold/silver targets and the Wildflower prospect, which includes the Larin’s Lane Gallium project. These exploration efforts represent Terrain Minerals’ core growth strategy, aiming to build on recent drilling successes.
Additional funds will support ongoing exploration at other projects, including the Biloela Copper/Gold Project in Queensland, as well as general working capital and offer-related expenses. The company emphasizes that the allocation of funds may be adjusted depending on subscription levels and operational outcomes.
Risks and Dilution Considerations
Terrain Minerals cautions that the offer is highly speculative and highlights several risk factors, including the inherent uncertainties of mineral exploration, environmental and native title considerations, and the company’s current financial position. The half-year financial report noted a net loss and a going concern qualification, which the directors believe will be addressed upon successful completion of the capital raising.
Shareholders who do not participate in the entitlement offer face dilution of approximately 21.28% on their shareholding. Should all new options be exercised, this dilution could increase to around 39.38%. The company has also set policies to prevent any single shareholder from exceeding 19.9% ownership through shortfall allocations.
Timetable and Next Steps
The offer timetable spans from the announcement and placement in April 2025 through to the expected quotation of new shares on ASX by late June 2025. Shareholder approval for the placement options is scheduled for a general meeting in July 2025. Investors are advised to carefully consider the prospectus and seek professional advice before participating.
Bottom Line?
Terrain Minerals’ capital raise is a pivotal step to fund exploration ambitions, but subscription levels and execution will be critical to its near-term outlook.
Questions in the middle?
- Will shareholder uptake meet the full $1.82 million entitlement offer target?
- How will the partial underwriting by directors influence market perception and control dynamics?
- What are the prospects and timelines for drilling results at the Smokebush Project to impact share value?