Elementos Faces Dilution and Licensing Risks Amid $2.9M Share Offer

Capital Raising Overview

Elementos Limited (ASX – ELT) has launched a significant capital raising initiative comprising a non-renounceable entitlement offer and an initial placement, aiming to raise approximately $8.9 million before expenses. The entitlement offer allows eligible shareholders to acquire one new share for every thirty shares held at an issue price of $0.28 per share, targeting a raise of up to $2.9 million. Concurrently, an initial placement to sophisticated and professional investors is expected to raise around $6 million.

In addition, the company has proposed a conditional placement to Metals X Limited, a substantial shareholder, to acquire up to 9.7 million new shares or a voting power cap of 19.99%, subject to shareholder approval under ASX Listing Rule 10.11. This strategic move underscores Metals X’s ongoing commitment to Elementos while maintaining regulatory compliance.

Use of Funds and Strategic Focus

The capital raised will primarily support the advancement of Elementos’ flagship projects. Key allocations include permitting and project development activities to achieve a Final Investment Decision (FID) for the Oropesa Tin Project in Spain, progressing negotiations with potential partners for offtake, financing, or project-level investment, and covering costs related to the Iberian Smelter Option Agreement.

Further funds will be directed towards advancing the Cleveland Tin and Tungsten Project through data acquisition and technical studies aimed at supporting a scoping study. General working capital needs will also be met from the proceeds, ensuring operational flexibility.

Offer Details and Shareholder Impact

The entitlement offer is non-renounceable, meaning shareholders cannot trade or transfer their entitlements. Shareholders who do not participate risk dilution of up to approximately 3.23% of their existing holdings. The offer is open exclusively to shareholders registered in Australia and New Zealand, excluding U.S. persons, reflecting compliance with international securities laws.

Eligible shareholders may also apply for additional shares under a top-up offer if other shareholders do not fully subscribe. The company retains discretion to limit share allocations to prevent any shareholder from exceeding a 20% voting power threshold, preserving balanced control.

Risks and Market Considerations

Elementos’ announcement includes a comprehensive risk disclosure highlighting exploration, permitting, funding, commodity price volatility, and operational risks inherent in the mining sector. Notably, the company is awaiting critical environmental and mining licenses for the Oropesa project, with no guarantees on timing or terms. Market conditions and foreign exchange fluctuations also pose potential challenges.

The company has engaged BW Equities as lead manager for the entitlement offer, with fees and incentives structured to support successful placement of any shortfall shares. The timetable for the offer spans from late November to late December 2025, with allotment and ASX quotation expected shortly thereafter.

Outlook

Elementos’ capital raising is a pivotal step in funding the transition from exploration to development for its key projects. The involvement of Metals X and the structured offer terms aim to balance shareholder interests while securing necessary capital. Investors will be watching closely for subscription levels, shareholder approval outcomes, and progress on permitting milestones that will shape the company’s near-term trajectory.