29Metals Prices $150M Entitlement Offer at $0.40 Amid Production Setbacks

Context and Rationale for the Equity Raising

29Metals Limited has launched a $150 million fully underwritten accelerated pro rata non-renounceable entitlement offer priced at $0.40 per new share, representing a significant discount to recent trading prices. The capital raising aims to enhance the company's liquidity position amid operational challenges and to fund key growth initiatives, notably the Gossan Valley project and the restart of Capricorn Copper operations.

The equity raising is structured with an institutional component conducted via bookbuild and a retail component, with major shareholders BUMA and AustralianSuper committing to substantial participation. Macquarie Capital acts as sole underwriter, ensuring full subscription.

Operational Challenges at Golden Grove

Golden Grove, 29Metals’ producing asset in Western Australia, faced significant disruptions in 2025 due to multiple seismic events at the Xantho Extended underground mine. These events restricted access to high-grade ore, impacting metal production and cash flow. Actual 2025 production fell short of initial guidance, with copper output at 22kt against a 22-25kt target, and zinc and gold also below expectations.

To mitigate these risks, the company is investing approximately $7 million in ground support upgrades at Xantho Extended, with a clear plan to recommence mining in April 2026. Meanwhile, the Gossan Valley project, an independent and relatively shallow mining front, remains on track for first ore by the end of 2026, promising to provide production flexibility and grade optimisation.

Capricorn Copper Restart and Regulatory Progress

Capricorn Copper, located in Queensland, has been suspended since March 2024 following extreme weather events that caused flooding and infrastructure damage. The restart hinges on successful water inventory reductions and securing regulatory approvals for a new Tailings Storage Facility (TSF). The Department of Environment, Tourism, Science and Innovation has confirmed the TSF application as properly made, with ongoing engagement to address requests for information.

29Metals is advancing a Restart Definitive Feasibility Study to accelerate the return to production, which previously delivered 24kt of copper at an all-in sustaining cost of US$3.71/lb, generating $66 million EBITDA in its last full year. The equity raising proceeds will support water management, regulatory processes, and exploration drilling to underpin the restart.

Exploration and Growth Prospects

Exploration remains a key pillar of 29Metals’ strategy. At Golden Grove, drilling in 2025 has yielded high-grade copper intercepts, highlighting potential mine-life extensions at Gossan Hill and the Cervantes deposit. Exploration plans for 2026 include testing extensions to existing ore sources and near-mine targets to sustain production beyond current reserves.

Similarly, Capricorn Copper’s extensive land position in the Mt. Isa Inlier offers significant exploration upside, with drilling targeting resource conversion and extensions at Esperanza South, Mammoth North, and Woolly mineralised areas. These efforts aim to enhance the asset’s value and support a sustainable restart.

Financial and Market Considerations

The entitlement offer is priced at a 30.2% discount to the theoretical ex-rights price and approximately 35.5% below the last closing share price, reflecting the company’s need to strengthen its balance sheet amid operational headwinds. The offer will increase the total shares on issue by approximately 27.3%, with dilution risks for shareholders who do not participate.

Senior lenders have provided covenant relief through mid-2026, accommodating the expected ramp-up at Golden Grove in the second half of 2026. The company continues to pursue cost discipline and productivity improvements to support financial resilience.

Risks and Outlook

29Metals faces a range of risks including commodity price volatility, regulatory approval delays, underground mining geotechnical challenges, and the inherent uncertainties of restarting suspended operations. The company’s ability to execute its growth projects and restore production at Capricorn Copper will be critical to its medium-term outlook.

Nevertheless, the equity raising provides a clear pathway to fund ongoing investments, maintain operational flexibility, and capitalise on exploration successes. The participation of cornerstone investors and full underwriting support underscores confidence in 29Metals’ strategy and asset base.