Underwriting Deal Shields Legacy Minerals Amid Market and Regulatory Risks
Legacy Minerals has locked in $4 million through an underwriting agreement to ensure full exercise of its listed options, bolstering its cash reserves to $10 million for advancing exploration at Mt Carrington.
- Underwriting agreement with Bell Potter secures $4 million funding
- Pro-forma cash balance to reach $10 million by end of 2025
- Funds targeted at silver, gold, and copper drilling at Mt Carrington
- 6% underwriting fee payable to Bell Potter Securities
- Detailed termination clauses protect underwriter’s interests
Funding Secured Through Underwriting Agreement
Legacy Minerals Holdings Limited (ASX, LGM) has successfully entered into an underwriting agreement with Bell Potter Securities Limited, securing up to A$4 million by ensuring the exercise of all unexercised listed options (LGMO) expiring in January 2026. This strategic move guarantees that the company will convert outstanding options into shares, providing a significant injection of capital.
The underwriting agreement covers 19.5 million options exercisable at A$0.205 each, with Bell Potter agreeing to subscribe for any shortfall shares if option holders do not exercise their rights. This arrangement comes with a 6% underwriting fee, amounting to approximately A$240,000, reflecting the underwriter’s compensation for assuming this risk.
Strengthening the Balance Sheet for Exploration
With this funding in place, Legacy Minerals anticipates a pro-forma cash balance of around A$10 million as of 31 December 2025. The company plans to deploy these funds primarily towards advancing its flagship Mt Carrington project in New South Wales. This includes discovery-focused drilling targeting silver, gold, and copper at key locations such as White Rock and Mascotte, alongside efforts to expand the existing Mineral Resource Estimate.
Additional capital will support further metallurgical and study work, as well as general working capital needs, positioning Legacy Minerals to accelerate its exploration and development timeline. The Mt Carrington project already boasts a significant mineral resource, estimated at 115 million ounces silver equivalent, underscoring the potential scale of the operation.
Risk Management and Market Conditions
The underwriting agreement includes a comprehensive set of termination events protecting Bell Potter’s interests. These cover a wide range of scenarios, from adverse commodity price movements, such as a 10% drop in gold, silver, or copper prices, to regulatory actions, share price declines, and changes in tenement status. Such clauses reflect the inherent risks in mineral exploration and capital markets, ensuring the underwriter can withdraw if material adverse effects arise.
Legacy Minerals also disclosed a broad portfolio of exploration projects across New South Wales, including nickel-cobalt at Nico Young and copper-gold targets at Thomson and Rockley, highlighting the company’s diversified approach to resource development beyond Mt Carrington.
Outlook and Strategic Implications
This capital raise through option underwriting not only strengthens Legacy Minerals’ financial position but also signals confidence in the company’s exploration strategy. By securing funding ahead of option expiry, Legacy Minerals mitigates dilution risks and ensures continuity in its drilling programs. Investors will be watching closely for drilling results and any updates on the exercise of options or potential termination events under the underwriting agreement.
Bottom Line?
Legacy Minerals’ $4 million underwriting deal sets the stage for a pivotal year of exploration at Mt Carrington, with market conditions and drilling outcomes poised to shape its next chapter.
Questions in the middle?
- Will all unexercised options be fully exercised by the expiry date?
- How will commodity price fluctuations impact the underwriting agreement’s stability?
- What are the expected timelines and milestones for the upcoming drilling campaigns?
