Shareholders Face Dilution as Zenith Opens Fully Underwritten $3.5m Capital Raise
Zenith Minerals has opened a fully underwritten $3.5 million entitlement offer, inviting shareholders to subscribe for new shares with free attaching options, aiming to bolster its gold and lithium exploration projects.
- Fully underwritten $3.5 million entitlement offer at $0.03 per share
- Two new shares for every seven held, plus one free option per three new shares
- Offer managed by Leeuwin Wealth and co-managed by Cumulus Wealth
- Proceeds to support gold and lithium exploration in Western Australia and Queensland
- Offer closes on 7 July 2025 with potential shareholder dilution
Entitlement Offer Details
Zenith Minerals Limited (ASX, ZNC) has officially opened a fully underwritten entitlement offer to raise $3.5 million. Eligible shareholders can subscribe for two new fully paid ordinary shares for every seven shares they currently hold, priced at 3 cents each. Additionally, for every three new shares subscribed, shareholders will receive one free attaching option exercisable at 7.7 cents, valid until July 31, 2027.
The offer is non-renounceable, meaning shareholders must participate directly or risk dilution if they choose not to subscribe. The offer is fully underwritten by Leeuwin Wealth Pty Ltd, which also acts as lead manager and corporate advisor, with Cumulus Wealth Pty Ltd as co-manager. This underwriting provides Zenith with financial certainty to proceed with its planned exploration activities.
Strategic Use of Funds
The capital raised will be directed towards advancing Zenith’s portfolio of gold and lithium projects across Western Australia and Queensland. Key assets include the Red Mountain Gold Project in Queensland, known for high-grade results, and lithium projects such as Split Rocks and Waratah Well in Western Australia. The company also holds a 25% interest in the Earaheedy Zinc Deposit, carried through to a bankable feasibility study with Rumble Resources Limited.
These projects position Zenith to capitalize on the growing demand for precious metals and battery minerals, sectors that continue to attract investor interest amid global energy transitions.
Timetable and Shareholder Participation
The entitlement offer opened on June 20, 2025, and is scheduled to close at 5pm Perth time on July 7, 2025, unless extended. Eligible shareholders with registered addresses in Australia, New Zealand, or the United Kingdom are invited to participate. The offer documents and personalised acceptance forms are available online, reflecting a modern approach to shareholder communications.
Shareholders can also apply for additional shares beyond their entitlement through a shortfall offer, up to 50% of their entitlement, providing an opportunity to increase their stake.
Implications for Shareholders
While the offer provides a chance to invest at a discounted price and gain free options, shareholders who do not participate will face dilution of their holdings. The company has explicitly noted the speculative nature of the investment and associated risks, urging shareholders to carefully consider the prospectus before subscribing.
Ineligible shareholders, those outside the specified jurisdictions, will not be able to participate and will experience dilution as new shares are issued.
Bottom Line?
Zenith’s fully underwritten entitlement offer sets the stage for accelerated exploration, but shareholder uptake will be key to its success and impact on dilution.
Questions in the middle?
- What level of shareholder participation will Zenith achieve by the closing date?
- How will the new capital specifically accelerate exploration milestones across Zenith’s projects?
- Could any shortfall securities be placed beyond the underwriting arrangement, and at what terms?