South Harz Secures A$3.11M Equity Raise with New Director Appointment

Capital Raising to Support Strategic Growth

South Harz Potash Limited (ASX, SHP) has announced a significant equity raising initiative designed to underpin its evolving dual-asset strategy. The company is seeking to raise up to A$3.11 million through a two-tranche placement and a 1-for-3 pro-rata non-renounceable rights issue, both priced at A$0.003 per share. This capital injection is intended to accelerate the company’s efforts to expand its portfolio and preserve the value of its flagship South Harz Potash Project in Germany.

The first tranche of the placement, raising approximately A$541,000, will be issued under existing ASX listing rules, while the second tranche, subject to shareholder approval in August 2025, aims to raise around A$1.29 million. Notably, K-Utec AG Salt Technologies, a key service provider and creditor, will receive shares in lieu of approximately A$457,000 owed, signaling strong confidence in South Harz’s prospects.

Advancing a Dual-Asset Strategy

South Harz’s dual-asset strategy focuses on two main objectives, the targeted acquisition of a second complementary minerals asset and the preservation and growth of the longer-term option value within its existing potash project. The company is actively pursuing the purchase of the neighbouring Sollstedt mine property, which offers significant infrastructure advantages and could reduce capital expenditure for its Ohmgebirge Development.

Meanwhile, South Harz is adopting a measured approach to its potash assets amid a subdued potash price environment. The company aims to maintain minimal holding costs while exploring additional non-dilutive funding sources such as German R&D tax rebates and ERMA funding. The recent certification of its R&D tax rebate application by the German Federal Ministry of Research paves the way for a potential cash refund of between A$400,000 and A$500,000 expected by the fourth quarter of 2025.

Governance and Market Positioning

In a move to bolster its leadership, South Harz has appointed Richard Pearce as a non-executive director effective 20 June 2025. Pearce brings over 30 years of experience in the critical minerals sector, with a proven track record in corporate governance, strategic leadership, and business development. His expertise is expected to enhance South Harz’s capability to identify and capitalize on new opportunities while maximizing the value of its potash assets.

Following the capital raising, South Harz plans a share consolidation on a 1-for-15 basis, subject to shareholder approval. This step aims to streamline the company’s capital structure and potentially improve market perception.

Looking Ahead

With binding commitments secured from directors and institutional investors, South Harz is well-positioned to execute its growth strategy over the next 9 to 12 months. The company’s focus on strategic patience, combined with targeted acquisitions and funding initiatives, reflects a pragmatic approach to navigating current market conditions while laying the groundwork for future value creation.