Tanami Gold NL (ASX:TAM) is raising $70.5 million through a fully underwritten renounceable rights issue priced at $0.06 per share, a 34.78% discount to the last traded price, to finance development of its Central Tanami Project.
- Fully underwritten renounceable rights issue to raise $70.5 million
- Issue price at $0.06 per share, 34.78% discount to last close
- Funds allocated to Groundrush decline, resource drilling, and infrastructure
- Entitlements tradable on ASX from May 12 to May 20
- Potential dilution of up to 50% for non-participating shareholders
Capital Raise to Fuel Central Tanami Development
Tanami Gold NL (ASX:TAM) has kicked off a sizeable capital raising, aiming to haul in approximately $70.5 million via a renounceable rights issue priced at 6 cents per share. The offer represents a steep 34.78% discount to the last traded price of 9.2 cents on May 5, 2026, underscoring the company's urgent need to secure funding for its flagship Central Tanami Project. This move is fully underwritten by Bell Potter Securities Limited, with Evolution Capital Pty Ltd joining as joint lead manager, ensuring the raise is locked in regardless of shareholder uptake.
The funds are earmarked primarily to cover Tanami’s 50% capital contribution to the Central Tanami Project Joint Venture (CTPJV), a 50:50 partnership with MGX Resources Limited. Key allocations include a $37.2 million underground decline development at the Groundrush Gold Mine, $5.5 million for surface resource drilling to upgrade inferred ounces to indicated, and over $23 million for infrastructure upgrades including central camp refurbishment and non-processing facilities such as wastewater treatment.
Significantly, the decline development contract was awarded to Macmahon Holdings Limited in April 2026, a $38 million deal set to commence in September 2026 and span 14 months. This contract is critical for enabling underground resource definition drilling and early ore access, a major step forward for the project’s development plans. The capital raise will underpin this and other exploration and refurbishment activities, positioning the project for an accelerated restart.
Offer Mechanics and Shareholder Impact
The rights issue offers one new share for every existing share held by eligible shareholders with registered addresses in Australia, New Zealand, Hong Kong, Mauritius, the British Virgin Islands, Singapore, the European Union (excluding Austria and France), and Taiwan. Entitlements will be tradable on the ASX from May 12 to May 20, allowing shareholders to sell or transfer their rights if they choose not to participate fully.
Tanami currently has 1.175 billion shares on issue, and the raise will double that to 2.35 billion shares if fully subscribed. Non-participating shareholders face dilution of up to 50%, a stark consequence of this pro rata offer. The offer excludes shareholders outside the specified jurisdictions, who will also see their holdings diluted accordingly. Notably, major shareholders APAC Resources Limited, Metals X Limited, and Everbright Securities Investment Services (HK) Ltd have committed to take up their full entitlements, collectively holding just under 50% post-raise, thereby maintaining their influence.
Shareholders should be aware that if entitlements are not taken up, the underwriter and sub-underwriters will absorb the shortfall, potentially increasing their stake but capped to comply with takeover provisions limiting any party’s holding to 20%. This safeguard aims to prevent any single investor from gaining control through the underwriting process.
Risks and Market Considerations
Tanami is upfront about the speculative nature of this investment. The rights issue carries no guarantee of dividends or capital return, and the company highlights risks spanning commodity price volatility, operational hurdles, regulatory approvals, and geopolitical uncertainties including ongoing international conflicts. Cybersecurity risks and potential underwriting termination events add further layers of uncertainty.
Given the project’s early development stage, there are also risks around feasibility studies, capital requirements, and joint venture dynamics. The company’s reliance on successful exploration and timely approvals means delays or cost overruns could materially impact outcomes. The market will watch closely how the raise is received and the subsequent progress on Groundrush and wider Central Tanami activities, including the planned underground decline development by Macmahon, which was detailed in recent coverage of the Macmahon contract for Groundrush decline.
Tanami’s Central Tanami Project has been under the spotlight with recent announcements of resource upgrades and drilling results, including a 2.8 million ounce gold resource update earlier in 2026. These developments provide context for the capital raise, as the company seeks to translate resource potential into production. The rights issue timing dovetails with ongoing exploration and infrastructure upgrades, as outlined in the Central Tanami JV resource update and recent drilling results at Groundrush and Jims, reinforcing the project's momentum.
Bottom Line?
The success of Tanami’s $70.5 million rights issue will be pivotal in funding critical development at Central Tanami, but the steep discount and dilution risk underscore the speculative nature of the investment.
Questions in the middle?
- Will shareholder uptake meet expectations or will the underwriter absorb a significant shortfall?
- How will the capital raise impact Tanami’s share price and liquidity in the near term?
- Can the Central Tanami Project meet its development milestones on schedule with this funding?