Riedel Resources Raises $1.3M to Advance Kingman Gold Project in Arizona
Riedel Resources launches a $1.3 million capital raise through a two-tranche placement and a Share Purchase Plan to advance its high-grade Kingman Gold Project in Arizona.
- Two-tranche placement to raise $1.0 million at $0.025 per share
- Share Purchase Plan targeting up to $0.3 million from existing shareholders
- Convertible notes conversion subject to shareholder approval
- Funds earmarked for exploration and study at Kingman Gold Project
- Broker fees and options to be issued pending shareholder approval
Capital Raising Strategy
Riedel Resources Limited (ASX, RIE) has announced a strategic capital raising initiative designed to inject up to $1.3 million into its operations focused on the Kingman Gold Project in Arizona, USA. The raise consists of a two-tranche placement totaling approximately $1.0 million and a Share Purchase Plan (SPP) offering eligible shareholders the opportunity to contribute up to an additional $0.3 million. The placement shares are priced at $0.025 each, representing a modest 7.4% discount to the recent trading price, a common approach to incentivize investor participation.
Placement Details and Shareholder Approval
The first tranche of the placement, raising about $347,000, is unconditional and utilizes the company’s existing placement capacities. The second tranche, aiming to raise approximately $653,000, is conditional upon shareholder approval expected at a general meeting in July 2025. This staged approach balances immediate funding needs with governance oversight, ensuring shareholders have a say in the larger capital injection.
Convertible Notes and Broker Incentives
Integral to this capital raising is the conversion of $665,000 worth of convertible notes into shares at the placement price, also subject to shareholder approval. This conversion will reduce debt and strengthen the equity base. Additionally, broker 708 Capital Pty Ltd will receive management and selling fees, along with options exercisable at $0.06 per share, pending approval. Notably, Oracle Capital Group, linked to Riedel’s chairman Scott Cuomo, will receive broker fees and options, highlighting the importance of transparency and shareholder consent in related-party transactions.
Share Purchase Plan and Investor Participation
The SPP opens on 27 June 2025 and allows existing eligible shareholders in Australia, New Zealand, and the UK to apply for up to $30,000 worth of shares at the same price as the placement. This non-underwritten plan provides a pathway for loyal shareholders to increase their stake, while the company retains discretion to scale back applications if oversubscribed. The SPP closes on 18 July 2025, with results to be announced shortly thereafter.
Use of Funds and Project Outlook
Proceeds from the placement and SPP will primarily fund exploration and study activities at the Kingman Gold Project’s high-grade Tintic deposit, alongside working capital needs. Chairman Scott Cuomo emphasized the favorable market conditions, citing strong gold prices and heightened regional exploration interest as catalysts enhancing the project’s value. The capital raise positions Riedel to advance its technical studies and evaluate processing options, critical steps toward unlocking the project’s potential.
Bottom Line?
Riedel’s capital raise sets the stage for accelerated exploration, but shareholder approvals will be pivotal in shaping the company’s next phase.
Questions in the middle?
- Will shareholder approval for the second tranche and convertible note conversion be secured without issue?
- How will the market respond to the dilution impact from the new shares and options?
- What are the timelines and milestones for exploration and processing studies at Kingman?
