Underwriting Deal Could Boost Manzano’s Stake Near 20% in Gold Mountain
Gold Mountain Limited launches a $3.5 million capital raise through an entitlement offer and placement to fund exploration projects in Brazil and Papua New Guinea, supported by key shareholders including Jose Luis Manzano.
- Pro rata entitlement offer to raise approximately $1.53 million at $0.05 per share with attaching options
- Placement of about $1.99 million at $0.06525 per share with director appointment rights
- Underwritten retail entitlement offer backed by major shareholder Jose Luis Manzano
- Funds allocated to exploration in Brazil, license maintenance in PNG, corporate and transaction costs
- Initial diamond drilling results received from Irajuba Prospect with more expected
Capital Raise Details
Gold Mountain Limited (ASX, GMN) has announced a combined pro rata accelerated entitlement offer and placement to raise approximately $3.5 million. The entitlement offer allows existing shareholders to purchase one new share for every four held at a discounted price of $0.05, accompanied by one option for every two new shares issued. This component aims to raise around $1.53 million before costs.
Complementing this, the company has secured a placement of roughly 30.4 million new shares at $0.06525 each, expected to raise nearly $2 million. Notably, the placement investor, Eagle Holdings 2 Limited, will gain the right to appoint a director to Gold Mountain’s board, signaling a strategic partnership.
Underwriting and Shareholder Support
The entitlement offer is underwritten by significant shareholders, including Jose Luis Manzano, who currently holds about 18% of the company’s shares. Manzano has committed to taking up his full entitlement and underwriting any shortfall in the retail offer, potentially increasing his stake to just under 20%. Other major shareholders such as Magnus Capital SA and Pellegri International Corp have also pledged support, collectively committing around $1 million.
Use of Funds and Strategic Focus
Funds raised will be directed primarily towards advancing exploration activities across Gold Mountain’s diverse portfolio, particularly in Brazil’s lithium, copper, and rare earth element projects. The company also plans to maintain its licenses in Papua New Guinea and cover corporate and transaction costs associated with the capital raising.
Exploration Progress
In parallel with the capital raise, Gold Mountain has received initial diamond drilling results from the Irajuba Prospect within its Down Under Project area in Brazil. While these early results are still being interpreted, the company anticipates further assay data over the next three months, which could provide valuable insights into the project's potential.
Looking Ahead
The entitlement offer and placement are scheduled to complete in October 2025, with retail shareholders invited to participate in the offer starting 6 October. The company remains in a trading halt until the institutional offer closes, after which normal trading will resume. Investors will be watching closely for the final allocation outcomes and forthcoming exploration results that could shape Gold Mountain’s near-term trajectory.
Bottom Line?
Gold Mountain’s $3.5 million capital raise sets the stage for intensified exploration, with shareholder backing and drilling results poised to influence its next growth phase.
Questions in the middle?
- How will the potential increase in Jose Luis Manzano’s stake affect Gold Mountain’s governance and strategic direction?
- What do the initial diamond drilling results from Irajuba reveal about the project’s commercial viability?
- Will the retail entitlement offer fully subscribe, or will shortfall underwriting be required?
