TechGen Metals’ $2.57M Capital Raise Risks Shareholder Dilution up to 62%

Capital Raise Details

TechGen Metals Ltd (ASX – TG1) has launched a fully underwritten pro-rata non-renounceable entitlement issue to raise up to approximately $2.57 million before costs. Eligible shareholders can subscribe for nine new shares for every ten shares held at an issue price of $0.018 per share. Additionally, for every two new shares subscribed, investors will receive one free attaching option exercisable at $0.036 with a three-year expiry.

The entitlement offer is fully underwritten by Anadara Asset Management Pty Ltd, with Managing Director Ashley Hood also sub-underwriting a portion of the offer. Joint lead managers Anadara and Cumulus Wealth have been appointed to manage the offer, which closes at 5 – 00pm WST on 2 September 2025.

Use of Funds and Strategic Focus

Funds raised will be directed primarily towards advancing exploration activities at TechGen’s key projects in Western Australia, including the Blue Devil copper-gold-silver project, Mt Boggola copper-gold-antimony target, and the El Donna gold project. Specifically, the company has allocated approximately 29% of the proceeds to heritage, drilling, and assay costs at Blue Devil, 23% to similar activities at Mt Boggola, and 6% towards reverse circulation drilling at El Donna. Additional funds will support geophysical surveys, other assets, working capital, and growth opportunities.

Shareholder Impact and Dilution

The offer will increase the total shares on issue from approximately 158.7 million to over 301 million, with options rising from 38.7 million to around 160.2 million. Shareholders who do not participate in the entitlement issue may face dilution of up to 47% from the new shares alone, and up to 62% if all options are exercised. The company has capped underwriter and sub-underwriter holdings to below 19.99% to mitigate control concerns.

Directors intend to participate in the entitlement offer, with Ashley Hood committing to sub-underwrite up to $223,000. The offer is non-renounceable, meaning shareholders cannot sell or transfer their entitlements, and any shortfall will be allocated at the directors’ discretion.

Risks and Market Context

TechGen Metals highlights the speculative nature of its securities, noting risks inherent in mineral exploration such as operational challenges, regulatory approvals, environmental compliance, and commodity price volatility. The company’s projects are at exploration and early development stages, with no defined reserves or resources under the JORC Code. Investors are advised to consider these risks carefully and seek professional advice.

The company’s pro-forma financial position post-offer shows strengthened cash reserves to support planned exploration and working capital needs for at least 24 months. However, further capital raisings may be required depending on exploration outcomes and market conditions.

Next Steps

Following the close of the entitlement offer, TechGen Metals will seek shareholder approval for the issue of options to joint lead managers and sub-underwriters. The market will be watching closely for uptake levels, exploration progress updates, and any subsequent capital raising activities, including a proposed placement.