Carbine’s Ununderwritten $1.1M Raise Poses Subscription Risk Amid Project Push
Carbine Resources Ltd (ASX: CRB) has announced a pro-rata entitlement offer to raise approximately $1.1 million, aiming to fund ongoing exploration and development at its Muchea West and Down South Silica Sand Projects.
- Pro-rata non-renounceable entitlement offer to raise up to $1.1 million
- Offer price set at $0.003 per share with a 2-for-3 share entitlement ratio
- Funds targeted for exploration, mining lease development, and business activities
- Offer opens 30 May and closes 11 June 2025, with shares trading expected from 19 June
- Offer is not underwritten; directors intend to participate
Capital Raise to Support Project Development
Carbine Resources Ltd (ASX: CRB), a mining company focused on silica sand projects, has announced a pro-rata entitlement offer to raise up to approximately $1.1 million. The offer allows eligible shareholders to subscribe for two new shares for every three shares held at an issue price of $0.003 per share. This capital raising initiative is designed to provide the company with the necessary funds to advance its key projects at Muchea West and Down South.
Details and Timeline of the Offer
The entitlement offer opens on 30 May 2025 and closes on 11 June 2025, with shares expected to commence trading on 19 June 2025. The offer is non-renounceable, meaning shareholders cannot sell their entitlements on the market. Eligible shareholders are those registered on 27 May 2025 and located in Australia, New Zealand, or China. The company has lodged the prospectus with ASIC and will dispatch it to shareholders shortly.
Use of Proceeds and Strategic Context
Proceeds from the entitlement offer will primarily fund ongoing exploration and development activities at the Muchea West and Down South Silica Sand Projects. This includes mining lease development, field reconnaissance, sampling, auger drilling, and business development efforts. The company also intends to cover general working capital and expenses related to the entitlement offer itself. These activities follow recent milestones such as the granting of a mining lease at Muchea West and securing access agreements at Down South, positioning Carbine Resources to progress its project pipeline.
Offer Management and Board Participation
Taylor Collison Limited has been engaged as the lead manager for the entitlement offer, with a fee structure including a 6% fee on gross proceeds plus administration fees. Notably, the offer is not underwritten, which introduces some uncertainty regarding full subscription. However, the company’s directors have expressed their intention to participate, signaling confidence in the capital raise and the company’s prospects.
Looking Ahead
Carbine Resources’ management acknowledges the challenging period the company has faced but remains optimistic about the future. Non-executive director James Pearse highlighted the importance of providing existing shareholders with the opportunity to support the company’s development at this stage. With the entitlement offer underway, the market will be watching closely to see how the company leverages this capital to unlock value from its silica sand assets.
Bottom Line?
Carbine’s $1.1 million raise sets the stage for critical project milestones, but subscription uptake will be key to watch.
Questions in the middle?
- Will the entitlement offer achieve full subscription given it is not underwritten?
- How will the additional capital impact Carbine’s project timelines and operational milestones?
- What are the potential risks if the offer falls short or if project development encounters delays?
