Eagle Mountain Faces Dilution Risks as $1.98M Entitlement Offer Opens Amid Funding Pressures

Capital Raising to Fuel Exploration Ambitions

Eagle Mountain Mining Limited (ASX – EM2) has taken a significant step to bolster its financial position and advance its copper-gold exploration projects in Arizona, USA, by lodging a prospectus for a non-renounceable entitlement offer. The company aims to raise up to approximately A$1.98 million by issuing new shares at A$0.009 each, accompanied by attaching options exercisable at A$0.02 until November 2028.

The entitlement offer is open to eligible shareholders registered in Australia, New Zealand, Malaysia, Singapore, and the United Kingdom as of 26 November 2025. Shareholders are entitled to subscribe for one new share for every six shares held, with one free attaching option for every three new shares subscribed. This offer follows a recent placement that raised A$1.66 million, also with attaching options, underscoring the company’s active capital raising efforts.

Strategic Focus on Silver Mountain and Oracle Ridge

The funds raised will primarily support exploration activities at the Silver Mountain Project, a geologically promising copper-gold asset located in the Laramide Arc region of Arizona. This area is notable for hosting world-class porphyry copper deposits, and Eagle Mountain has identified multiple geophysical anomalies and surface mineralisation indicative of significant potential.

In addition to Silver Mountain, Eagle Mountain is progressing key agreements related to the Oracle Ridge Project and the adjacent Wedgetail Project. Notably, the company has secured a 12-month option agreement with Marble Mountain Ventures LLC to acquire surface and mineral rights, including the Oracle Ridge mine infrastructure. This option involves staged payments totaling up to US$10.54 million, payable before commercial production commences.

Further, Eagle Mountain has renegotiated loan terms with Vincere Resource Holdings LLC, deferring repayments and securing an early repayment option contingent on entering into a binding agreement with a third party for Oracle Ridge’s exploration and development. The company has also received a non-binding indicative offer from Nittetsu Mining Co., Ltd, a mid-tier Japanese mining company, proposing a joint venture where Nittetsu could earn an 80% interest by investing approximately US$20 million over four years.

Financial Position and Risks

As of 30 September 2025, Eagle Mountain held cash reserves of approximately A$0.56 million, with a market capitalisation of around A$10.2 million. The company’s financial statements reveal a loss after tax of over A$15 million for the year ended 30 June 2025 and a net operating cash outflow exceeding A$3.7 million, highlighting the critical need for ongoing capital to sustain operations and exploration.

The entitlement offer is not underwritten, meaning subscription levels will directly impact the company’s funding and shareholder dilution. If shareholders do not fully subscribe, dilution could reach up to 14.3%. The company’s exploration activities and future viability remain subject to risks including commodity price volatility, currency fluctuations, exploration uncertainties, and the successful execution of strategic agreements.

Governance and Shareholder Participation

The board, led by Non-Executive Chairman Rick Crabb and Executive Director Fabio Vergara, has indicated their intention to participate in the entitlement offer, collectively subscribing for approximately 4.5 million new shares. Joint lead managers Prenzler Group and Alto Capital have been appointed to assist with placement of any shortfall shares.

Eligible shareholders are encouraged to carefully consider the offer, which is designed to strengthen Eagle Mountain’s balance sheet and support its strategic development in a globally significant copper-gold region. The company’s next steps include dispatching the prospectus to shareholders on 1 December 2025, with the offer closing on 17 December 2025.