Paterson Resources Kicks Off $2M Raise to Power Grace Project Drilling

• Non-renounceable pro-rata entitlement offer – 1 new share per 8 held
• Issue price set at $0.018 per new share with one free attaching option each
• Placement to sophisticated investors raising approximately $910,000
• Funds allocated to 8,500m drilling program, scoping study, and mining lease application
• Potential dilution of up to 23.58% for non-participating shareholders

Capital Raising Overview

Paterson Resources Limited (ASX, PSL) has unveiled a strategic capital raising initiative targeting approximately $2 million before costs. The raise comprises a placement to sophisticated and professional investors, including a tranche subject to shareholder approval for a director, alongside a non-renounceable pro-rata entitlement offer to existing eligible shareholders.

The entitlement offer allows shareholders to subscribe for one new share for every eight shares held as of the record date, at an issue price of 1.8 cents per share. Each new share issued under this offer comes with one free attaching option exercisable at 2.8 cents, valid for three years. The placement component has already issued a tranche of shares to institutional investors, with a further tranche to a director pending shareholder approval.

Use of Proceeds and Project Focus

Funds raised will primarily support the advancement of the Grace Project in Western Australia. This includes an 8,500-metre drilling program designed to expand and update the mineral resource estimate, progress a mining lease application, and complete a scoping study. Additional proceeds will cover the costs associated with the capital raising and provide ongoing working capital to support company operations.

The Grace Project represents a key asset for Paterson Resources, and the drilling program is a critical step toward unlocking its potential. The company’s focus on expanding its resource base and progressing regulatory approvals signals a commitment to moving the project closer to development.

Shareholder Impact and Risks

Shareholders should be aware of the dilution risk inherent in the entitlement offer. Those who do not participate may see their holdings diluted by approximately 11.11% immediately, with potential aggregate dilution reaching 23.58% if all attaching and placement options are exercised. The company has emphasized that no shareholder will be issued shares that would increase their voting power above 20%, in compliance with regulatory limits.

Paterson Resources also highlights the speculative nature of investing in mineral exploration companies. Risks include uncertainties in exploration outcomes, regulatory approvals, environmental considerations, and market conditions. The company cautions investors to consider these factors carefully and consult professional advisers before participating.

Governance and Next Steps

The capital raising is not underwritten, and the company retains discretion over any shortfall securities not taken up by shareholders. The timetable anticipates the offer closing on 23 October 2025, with securities expected to be issued shortly thereafter. Shareholder approval for the director placement tranche is scheduled for the upcoming annual general meeting.

Executive Director Matthew Bull has indicated his intention to participate fully in the entitlement offer, signaling confidence in the company’s prospects. Investors will be watching closely for drilling results, resource updates, and regulatory progress as key milestones unfold.

Bottom Line?

Paterson Resources’ $2 million raise sets the stage for critical drilling at Grace Project, but investors must weigh dilution and exploration risks carefully.

Questions in the middle?

• Will the entitlement offer achieve full subscription or will there be a significant shortfall?
• How will the upcoming FY2025 Annual Report influence investor sentiment during the offer period?
• What are the expected timelines and potential hurdles for mining lease approval at the Grace Project?