Celsius Resources Limited has launched an offer of up to 423.95 million new options to key placement participants, including Silvercorp Metals and its lead manager, aiming to support ongoing project funding without immediate capital inflow.
- Offer of 423.95 million new options exercisable at $0.01, expiring in three years
- Options issued free-attaching or for nil consideration, raising no immediate funds
- Participation by Silvercorp Metals and company directors in placement
- Offer conditional on shareholder approval for additional tranche options
- Risks include sovereign, operational, dilution, and quotation uncertainties
Strategic Options Offer Launched
Celsius Resources Limited (ASX: CLA) has issued a detailed prospectus announcing an offer of up to 423.95 million new options. These options are being made available to placement participants, including the substantial shareholder Silvercorp Metals Inc., and the company's lead manager, Pac Partners. The options carry an exercise price of $0.01 each and will expire three years from their issue date.
Unlike traditional capital raisings, this offer will not immediately raise funds for the company, as the options are issued free-attaching to shares already placed or for nil cash consideration. The company anticipates receiving approximately $4.24 million only if all options are exercised in the future, which remains uncertain.
Capital Structure and Shareholder Impact
Upon completion, assuming full subscription and shareholder approval for the additional tranche, the new options could dilute existing shareholders by up to 11.91%. The offer includes 233.1 million options to initial placement participants, 122.1 million to tranche 2 placement participants including Silvercorp, and 68.75 million options to the lead manager as part of their remuneration for bookrunning services.
The company has confirmed that the offer is not underwritten and that the options will be quoted on the ASX subject to meeting listing requirements. Should the ASX requirements not be met, the options will be issued as unquoted securities, potentially limiting liquidity.
Project Funding and Operational Risks
Celsius is actively progressing its flagship MCB Project in the Philippines, where it has secured a 25-year mineral production sharing agreement. The company recently signed a binding term sheet for a USD 76.4 million bridge loan facility intended to fund feasibility updates and front-end engineering design. However, finalization of loan documentation remains subject to conditions precedent, and delays could impact project timelines and share price.
The company also holds interests in the Sagay and Botilao prospects in the Philippines and the Opuwo Cobalt Project in Namibia. Both jurisdictions carry sovereign risks including regulatory changes, taxation, and political stability concerns. The prospectus highlights these as material risks alongside operational challenges typical of mineral exploration and development.
Governance and Shareholder Participation
Directors Mark van Kerkwijk and Paul Dudley are participating in the placement, aligning management interests with shareholders. The offer requires shareholder approval for the additional options tranche, scheduled for a general meeting on 30 June 2025. The company cautions investors that failure to obtain approval would result in non-issuance of those options.
The prospectus also outlines comprehensive risk factors, including dilution, quotation risk, commodity price volatility, environmental compliance, and general economic conditions. Investors are advised to consider these carefully and seek professional advice before participating.
Bottom Line?
As Celsius Resources advances its project funding and strategic partnerships, investors will watch closely for shareholder approvals and the finalization of critical financing agreements.
Questions in the middle?
- Will shareholders approve the additional tranche of options at the upcoming general meeting?
- Can Celsius finalize the USD 76.4 million bridge loan to fully fund the MCB Project's next phase?
- How will sovereign and operational risks in the Philippines and Namibia impact project timelines and valuations?