How Will 29Metals’ $150M Equity Raise Shape Its Recovery and Growth?
29Metals has announced a $150 million fully underwritten equity raising at a significant discount to support recovery from seismic disruptions at Xantho Extended and to advance key growth projects.
- Fully underwritten 1 for 3.66 entitlement offer to raise $150 million
- Offer price set at $0.40 per share, a 35.5% discount to last close
- Funds to address production impact from 2025 seismic events and support Gossan Valley and Capricorn Copper projects
- Major shareholders BUMA and AustralianSuper committed to participate
- BUMA may increase stake up to 25.8% depending on shortfall
Context and Rationale
29Metals Limited (ASX, 29M) has launched a significant equity raising to the tune of $150 million, aimed at cushioning the company from the operational disruptions caused by seismic events at its Xantho Extended mine during 2025. These events have impacted metal production forecasts for both 2025 and 2026, prompting the company to seek additional capital to maintain momentum on its broader growth agenda.
The equity raising is structured as a fully underwritten 1 for 3.66 accelerated pro rata non-renounceable entitlement offer priced at $0.40 per share. This price represents a steep discount of 35.5% to the last closing price of $0.62, reflecting the market’s cautious stance amid the production uncertainties.
Strategic Use of Proceeds
Proceeds from the capital raise will primarily support working capital needs arising from the seismic impact, enabling 29Metals to continue investing in its key projects without deferral. Notably, the company plans to accelerate development at the Gossan Valley project, where a $112 million capital expenditure is targeted to reach first ore by the end of 2026. Additionally, funds will support the progression of a Restart Definitive Feasibility Study at Capricorn Copper, a critical step towards resuming production there.
Exploration drilling across the portfolio will also be funded, underscoring 29Metals’ commitment to long-term value creation despite near-term operational challenges.
Shareholder Support and Underwriting
Major shareholders BUMA and AustralianSuper have demonstrated strong support by committing to take up their entitlements, subscribing for $29.2 million and $26.8 million respectively. BUMA has also agreed to acquire any shortfall shares up to $41.5 million, potentially increasing its stake in 29Metals to approximately 25.8% post-offer.
The equity raising is fully underwritten by Macquarie Capital (Australia) Limited, with Morgans Corporate Limited also acting as joint lead manager and bookrunner. This underwriting arrangement provides a safety net, ensuring the company secures the full $150 million regardless of retail or institutional uptake.
Market Implications and Outlook
The discounted offer price and dilution from the new shares; approximately 27.3% of current issued capital; will likely weigh on the share price in the short term. However, the capital injection is critical for 29Metals to navigate the seismic disruption without sacrificing its growth trajectory.
CEO James Palmer emphasised the company’s clear plan to recommence mining at Xantho Extended by April 2026 and highlighted the equity raising as a means to maintain strategic investments across the portfolio. The market will be watching closely how effectively 29Metals manages the restart and whether the growth projects deliver on their promise to offset near-term production setbacks.
Bottom Line?
29Metals’ capital raise is a decisive move to weather seismic challenges and keep growth ambitions on track, but execution risks remain.
Questions in the middle?
- Will the planned April 2026 restart at Xantho Extended proceed on schedule without further delays?
- How will the potential increase in BUMA’s stake influence corporate governance and strategic decisions?
- Can the Gossan Valley and Capricorn Copper projects deliver expected returns to justify the dilution?
