Speculative Risks Loom as Constellation Resources Opens $2.52M Capital Raise

Overview of the Entitlement Offer

Constellation Resources Limited (ASX: CR1) has announced a non-renounceable pro-rata entitlement offer to raise approximately $2.52 million before costs. The offer is priced at $0.12 per new share, allowing eligible shareholders to subscribe for one new share for every three shares held as of the record date, 28 May 2025. The offer opens on 30 May and closes on 16 June 2025.

This capital raising is designed to provide the company with additional funds to advance its exploration activities in Western Australia, as well as to bolster general working capital. The company currently has approximately 63 million shares on issue and expects to issue around 21 million new shares if the offer is fully subscribed.

Use of Proceeds and Capital Structure

The proceeds from the entitlement offer will primarily fund exploration programs at the company’s Western Australian projects, with an allocation of approximately $2.12 million. A further $300,000 is budgeted for corporate administrative costs, and $100,000 for costs associated with the offer itself.

Upon completion, assuming full subscription and no changes in option exercises, the company’s share capital will increase to approximately 84 million shares, with 7.75 million options outstanding. The new shares will rank equally with existing shares, carrying the same rights and entitlements.

Offer Mechanics and Participation

The entitlement offer is non-renounceable, meaning shareholders cannot trade or transfer their entitlements. Eligible shareholders are those registered with addresses in Australia, New Zealand, Germany, or the United Kingdom, excluding those acting for the benefit of persons in the United States. Ineligible shareholders will not be able to participate.

Shareholders can accept all, part, or none of their entitlement by following the instructions in the accompanying acceptance form and making payment via BPAY or electronic funds transfer by the closing date. Directors of the company have indicated their intention to fully participate in the offer.

Any shares not taken up by eligible shareholders will form part of a shortfall offer, which the directors may allocate at their discretion, subject to regulatory limits on control and voting power.

Risks and Considerations

The company highlights that investment in its shares remains speculative and subject to numerous risks. These include tenure risks related to mining and exploration licenses, reliance on key personnel, the inherent uncertainties of exploration and development, commodity price volatility, and regulatory and environmental compliance risks.

There is no underwriting for the entitlement offer, so the amount raised depends on shareholder participation and any shortfall allocations. The company cautions that failure to raise the targeted funds could impact its exploration plans and financial position.

Regulatory and Market Context

Constellation Resources complies with disclosure obligations under the Corporations Act and ASX Listing Rules, providing transparency on the offer and associated risks. The company’s announcements and financial reports are publicly available on its website and the ASX platform.

The offer document also outlines shareholder rights attaching to the new shares, including voting, dividend entitlements, and transferability, consistent with the company’s constitution and Australian corporate law.