Copper Search Unveils $504K Entitlement Offer with Attaching Options to Boost Exploration
Copper Search Limited has announced a non-renounceable entitlement offer to raise approximately $504,364, issuing new shares at $0.017 each with attaching options exercisable at $0.034 until mid-2027. The capital raising aims to support exploration drilling and business development across its Australian mineral projects.
- Non-renounceable entitlement offer: 1 new share for every 4 held
- Offer price set at $0.017 per new share with attaching options exercisable at $0.034
- Capital raising target approximately $504,364, supplemented by a $408,526 placement
- Funds allocated to heavy mineral sands drilling, project generation, and working capital
- Potential dilution of up to 75% for shareholders not participating in the offer
Overview of the Capital Raising
Copper Search Limited (ASX: CUS) has launched a non-renounceable pro-rata entitlement offer to raise up to approximately $504,364. Eligible shareholders are invited to subscribe for one new share for every four shares held at a price of $0.017 per share. Each new share will come with attaching options exercisable at $0.034, valid until 31 July 2027.
This offer is complemented by a parallel placement to sophisticated investors, expected to raise an additional $408,526, also at $0.017 per share. Together, these initiatives form a capital raising package designed to bolster Copper Search’s exploration and development activities.
Use of Proceeds and Strategic Focus
The funds raised will primarily support targeted air-core drilling programs aimed at unlocking the potential of heavy mineral sands (HMS) projects in South Australia, notably the Peake Sands Project. Additional capital will be directed towards project generation activities within South Australia, as well as low-cost target drilling at the Byrock and Theseus projects in New South Wales. A portion of the proceeds will also fund general business development and working capital requirements.
This focused investment underscores Copper Search’s commitment to advancing its mineral exploration portfolio, with an emphasis on delineating economically viable deposits and progressing towards potential resource development.
Offer Structure and Shareholder Impact
The entitlement offer is non-renounceable, meaning shareholders cannot trade or transfer their rights. Shareholders who do not participate risk dilution of their holdings by up to approximately 75%. The company has also introduced a shareholder shortfall offer, allowing eligible shareholders to apply for additional shares not taken up under the entitlement offer.
What's more, a public shortfall offer will be conducted at the directors’ discretion to place any remaining shares, potentially at a discount to the offer price. The capital raising will increase the total shares on issue from approximately 142.7 million to up to 172.4 million, assuming full subscription and no prior option exercises.
Risks and Considerations
Copper Search’s directors emphasize the speculative nature of the investment, highlighting risks including exploration uncertainties, commodity price volatility, regulatory and environmental compliance, and funding challenges. The offer is not underwritten, and there is no guarantee it will be fully subscribed. Should the offer fall short, Copper Search may need to seek alternative funding or consider asset disposals, which could impact shareholder value.
Substantial shareholders such as Macallum Labonne Group Enterprises and BNP Paribas Nominees currently hold significant stakes but have not committed to participate fully in the offer, which could influence control dynamics depending on subscription levels.
Governance and Fees
The company has engaged GBA Capital Ltd as lead manager for the capital raising, with fees structured as a percentage of gross proceeds raised. Directors and senior management hold interests in the company and may participate in the offer. The timetable for the offer spans from a trading halt on 26 May 2025 through to the anticipated issue and quotation of new shares by early July 2025.
Bottom Line?
As Copper Search embarks on this critical capital raising, investors will be watching closely to see how subscription levels and exploration outcomes shape the company’s next phase of growth.
Questions in the middle?
- Will the entitlement offer achieve full subscription given it is not underwritten?
- How will the participation of major shareholders affect control and voting power post-offer?
- What are the near-term exploration milestones and how might they influence share price momentum?