Paterson Resources Raises A$2m at 14% Discount to Fund Drilling
Paterson Resources has raised A$2 million through a discounted placement and entitlement offer, fully funding an 8,500m drilling program and key project studies at its Grace Project.
- A$0.91m placement at 1.8c per share with 1 free option per share
- Non-renounceable entitlement offer to raise A$1.09m on same terms
- Director Matthew Bull commits A$400,000 subject to shareholder approval
- Funds to support drilling, resource upgrade, mining licence application, and scoping study
- 15 million performance rights proposed for directors, pending approval
Capital Raise Details
Paterson Resources Limited (ASX, PSL) has announced a combined capital raising of approximately A$2 million through a placement and a non-renounceable entitlement offer. The placement, which secured firm commitments of around A$910,000, was priced at 1.8 cents per share, representing a roughly 14% discount to the company’s recent five-day volume weighted average price. Each share issued under the placement comes with a free attaching option exercisable at 2.8 cents, valid for three years.
The entitlement offer will allow existing shareholders to subscribe for one new share for every eight shares held, also at 1.8 cents per share, with a matching free option attached. This offer aims to raise an additional A$1.09 million, further bolstering the company’s cash position.
Strong Support and Director Participation
The placement was notably supported by Paterson’s top 20 shareholders and sophisticated investors, signaling confidence in the company’s strategy. Director Matthew Bull has committed to participate in the placement to the tune of A$400,000, although this is subject to shareholder approval at the upcoming Annual General Meeting. Additionally, the company plans to issue 15 million performance rights to directors, contingent on milestone achievements and shareholder consent.
Use of Funds and Project Outlook
The freshly raised capital positions Paterson Resources to fully fund an 8,500-metre drilling program at the Grace Project. This program is designed to expand and upgrade the existing JORC-compliant resource, a critical step toward advancing the project’s development. Beyond drilling, the funds will support the application for a mining licence and the completion of a scoping study, both essential milestones for moving the Grace Project closer to production.
The company’s timetable outlines key dates for the placement and entitlement offer, including the expected issue of shares and options around 19 August, and the lodging of the prospectus by 26 August. Shareholders will receive detailed information and personalised forms to participate in the entitlement offer starting early September.
Strategic Implications
This capital raise reflects Paterson’s commitment to advancing its flagship Grace Project with a clear focus on resource growth and regulatory progress. The involvement of major shareholders and directors underscores internal confidence, while the attached options provide potential upside for investors if the company’s share price appreciates. However, the success of the entitlement offer and shareholder approvals remain pivotal to fully realising these plans.
Bottom Line?
Paterson’s A$2 million raise sets the stage for a pivotal drilling campaign, but shareholder approvals and offer uptake will be key to watch.
Questions in the middle?
- Will shareholder approval be secured for director Matthew Bull’s participation and the performance rights issuance?
- How will the market respond to the dilution from the placement and entitlement offer?
- What are the anticipated timelines and milestones for the Grace Project’s mining licence and scoping study?
