Cannindah Resources Launches $4.55M Rights Issue to Accelerate Mt Cannindah Exploration
Cannindah Resources Limited has announced a fully underwritten non-renounceable rights issue to raise approximately $4.55 million at a 21% discount, aiming to fund exploration at its flagship Mt Cannindah Copper-Gold Project and strengthen working capital.
- Fully underwritten rights issue to raise $4.55 million
- Issue price set at 1.5 cents per new share, 21.1% discount to recent share price
- Offer includes attaching options exercisable at 4 cents within 3 years
- Funds targeted for exploration program and working capital
- Directors and major shareholder Aquis Finance committed to participate and sub-underwrite
Rights Issue Overview
Cannindah Resources Limited (ASX – CAE) has launched a fully underwritten non-renounceable rights issue, offering eligible shareholders the opportunity to subscribe for 1 new share for every 2.4 shares held at an issue price of 1.5 cents per share. The offer includes 1 attaching option for every 2 new shares subscribed, exercisable at 4 cents within three years. The company aims to raise approximately $4.55 million before costs, with the offer price representing a 21.1% discount to the recent volume-weighted average share price.
Purpose and Use of Funds
The proceeds from the capital raising will primarily fund an accelerated exploration program at the Mt Cannindah Copper-Gold Project in central Queensland, a key asset for Cannindah. The exploration budget allocates nearly $2.45 million to drilling and geological activities targeting extensions of the Cannindah Breccia mineral resource and other high-priority porphyry targets. Additionally, $1.77 million is earmarked for working capital, including payments to creditors and operational expenses, while $328,000 will cover offer-related costs.
Underwriting and Shareholder Participation
The rights issue is fully underwritten by Canaccord Genuity (Australia) Limited, providing certainty of funds raised. Major shareholder Aquis Finance has committed to take up its full entitlement, representing approximately $1.55 million, but will not increase its stake beyond its current 33.97% holding. Directors have also committed to fully participate in their entitlements and sub-underwrite a portion of the offer, reinforcing confidence in the company’s prospects.
Impact on Capital Structure and Shareholders
If fully subscribed, the issue will increase Cannindah’s issued shares by approximately 303 million, diluting existing shareholders by up to 29.4% if they do not participate. The attaching options add a potential future capital component, exercisable over three years. The offer excludes shareholders with registered addresses outside Australia, New Zealand, and Hong Kong, who will face dilution. The company highlights the speculative nature of the investment and outlines comprehensive risk factors including operational, environmental, regulatory, and financing risks.
Next Steps and Market Implications
The offer opens on 1 September 2025 and is expected to close on 23 September 2025, with new shares anticipated to commence trading on the ASX by 30 September 2025. Investors should note the non-renounceable nature of the rights, meaning entitlements cannot be traded. The capital raise positions Cannindah to advance its exploration strategy in a tier-one jurisdiction, but market participants will be watching closely for subscription levels and subsequent exploration results to validate the company’s growth potential.
Bottom Line?
Cannindah’s fully underwritten rights issue sets the stage for a pivotal exploration phase, but shareholder dilution and execution risks remain key watchpoints.
Questions in the middle?
- Will the rights issue achieve full subscription given the 21% discount and market conditions?
- How will the exploration results funded by this raise influence Cannindah’s valuation and project development timeline?
- What are the potential impacts if underwriting termination events are triggered before completion?
