Westar Resources is set to raise $1.49 million through a two-tranche share placement aimed at funding exploration and new project due diligence. The placement features discounted share prices and awaits shareholder approval for the larger second tranche.
- Two-tranche placement to raise $1.49 million
- Tranche 1 issues 40 million shares at $0.006 under existing capacity
- Tranche 2 seeks shareholder approval for 250 million shares at $0.005
- Discounts of 19.8% and 33.2% to recent volume-weighted average prices
- CPS Capital Group appointed lead manager with fees and options
Capital Raising to Fuel Growth
Westar Resources Limited (ASX: WSR) has announced a strategic capital raising initiative designed to support its ongoing exploration activities and due diligence on potential new projects. The company plans to raise $1.49 million through a two-tranche placement, signalling its intent to maintain momentum in the highly prospective gold and copper regions of Western Australia.
The first tranche involves issuing 40 million shares at $0.006 each, utilising the company’s existing placement capacity approved at the 2025 annual general meeting. This tranche is already secured with firm commitments from sophisticated and professional investors, providing immediate funding without the need for shareholder approval.
Shareholder Approval Pending for Second Tranche
The second tranche is more substantial, proposing the issue of 250 million shares at a slightly lower price of $0.005 per share. This tranche requires shareholder approval, with a meeting expected in early April 2026. The discounted pricing on both tranches reflects a 19.8% and 33.2% reduction respectively compared to the recent five-day volume weighted average share price, a move that may attract investors looking for value entry points but also raises questions about dilution and valuation.
Funds raised will be allocated towards exploration efforts in Westar’s key project areas within the Yilgarn Craton, including regions near Southern Cross and Sandstone, as well as general working capital and costs associated with evaluating new opportunities. This focus underscores Westar’s commitment to advancing its resource base in supportive jurisdictions.
Lead Manager and Associated Fees
CPS Capital Group Pty Ltd has been appointed as lead manager for the placement. The arrangement includes a 2% placement fee, a 6% management fee, and the issuance of 40 million options exercisable at $0.008 within three years. These terms align CPS Capital’s incentives with Westar’s growth prospects, while also reflecting typical market practices for capital raises of this nature.
Non-executive director Eddie King is the company’s point of contact for further information, highlighting the company’s transparent communication approach during this capital raising phase.
Looking Ahead
As Westar moves towards the shareholder vote in April, investors will be watching closely to gauge support for the second tranche and the company’s broader strategy. The successful completion of this placement could provide the necessary runway for Westar to accelerate exploration and potentially unlock value in its gold and copper assets.
Bottom Line?
Westar’s upcoming shareholder vote will be pivotal in determining its exploration funding trajectory and market confidence.
Questions in the middle?
- Will shareholders approve the sizeable second tranche at a deeper discount?
- How will the placement impact existing shareholders in terms of dilution?
- What specific projects will benefit most from the new capital injection?