Underwriting Cap Raises Questions on Macarthur Minerals’ Funding and Control Risks

Context and Offer Amendments

Macarthur Minerals Limited has issued a Supplementary Prospectus dated 23 July 2025, amending its Replacement Prospectus from June. The key update introduces a cap on the underwriter GVY’s shareholding to a maximum of 19.99% of the company’s issued capital without requiring shareholder approval. This move reflects a careful balancing act between securing full underwriting support for the $2 million rights issue and maintaining shareholder control and regulatory compliance.

The Supplementary Prospectus also revises the offer timetable, pushing back key dates including the closing and trading periods, providing shareholders with additional time to consider their entitlements and participate in the offer.

Shareholder Impact and Underwriting Structure

The rights issue is renounceable, allowing shareholders to trade or transfer their entitlements. Notably, the underwriter’s ability to subscribe for any shortfall is now limited to shares representing no more than 19.99% ownership unless shareholder approval is obtained. Should the shortfall exceed this threshold, GVY may appoint sub-underwriters or the company will seek shareholder approval to issue the excess shares. This structure aims to prevent excessive concentration of ownership and potential dilution concerns.

Substantial shareholders such as the Copulos Group and Alemar Developments Pty Ltd are expected to fully participate, with directors Cameron McCall and Alan Phillips also committing to take up their entitlements, signalling confidence in the capital raise.

Financial Position and Use of Funds

The updated pro-forma balance sheet reflects the impact of the rights issue, with anticipated proceeds of approximately $2 million before costs. Funds will be allocated primarily to statutory tenement and exploration expenditures at the Lake Giles Iron Project, repayment of trade payables and a short-term loan facility, and general corporate overheads. The company has clarified that exploration activities will focus on tenements not covered by existing commercial agreements, ensuring compliance and continuity of tenure.

Enhanced Risk and Environmental Disclosures

In response to regulatory reviews, Macarthur Minerals has expanded its disclosure on environmental regulation and climate change risks. The company acknowledges evolving legislation that may impose stricter standards and costs, as well as the potential operational impacts of climate change, including energy costs and extreme weather events. These disclosures underscore the company’s awareness of the broader challenges facing mining operations in a transitioning economy.

Regulatory and Legal Updates

The Supplementary Prospectus confirms no new material legal proceedings beyond ongoing ASIC investigations. It also updates continuous disclosure obligations and market price information, reflecting recent trading activity. The company remains committed to transparency and compliance as it navigates the capital raising process.