Avenira launches $49 million rights issue to develop Wonarah phosphate mine

Avenira targets $49 million to kickstart Wonarah mining

Avenira Ltd (ASX:AEV) has launched a substantial capital raising to fund the next phase of its Wonarah Phosphate Project in the Northern Territory. The company is offering a three-for-two renounceable rights issue priced at 0.6 cents per share, a 25% discount to its last traded price of 0.8 cents and 23% below the 10-day volume weighted average price.

The rights issue aims to raise up to $48.87 million before costs, with proceeds earmarked for capital works including procurement of a mining fleet, camp expansions, site infrastructure, and mine development. This move marks a pivotal step as Avenira shifts from project developer to producer, with pre-strip mining activities targeted to commence in the fourth quarter of 2026 and first direct shipping ore (DSO) shipments expected in the first half of 2027.

Shareholder participation and control considerations

The rights issue is open to eligible shareholders across Australia, New Zealand, Hong Kong, China, and Singapore, with the rights tradable on the ASX from 19 August until 3 September 2026. The offer closes on 10 September 2026. Eligible shareholders may also apply for additional shares beyond their entitlement through a Top Up Offer, subject to board discretion.

Avenira’s major shareholder, Hebang Biotechnology (Hong Kong) Investment Limited, which currently holds a 60% voting stake, has committed to fully participate in the rights issue to maintain its ownership level. Hebang has provided an undertaking that its voting power will not exceed 60% post-raising, ensuring no change in control for the company’s largest shareholder.

Capital allocation focused on operational build-out

The company has outlined a detailed use of funds, with approximately 31% allocated to mining fleet and equipment procurement, 18% each to camp expansion and mine development, and 15% to site infrastructure including road construction. Working capital and general corporate purposes account for nearly 10% of the raise, while estimated offer expenses represent about 1.4% of the proceeds.

This capital injection is critical for Avenira to advance the Wonarah project’s direct shipping ore operations, with longer-term plans for beneficiation and downstream processing, including a proposed yellow phosphorous feasibility study after beneficiation plant commissioning.

Jundee South gold project remains a secondary focus

Alongside Wonarah, Avenira holds the Jundee South gold exploration project in Western Australia, situated in a prolific gold belt. While the company recently approved a $2.6 million exploration budget for Jundee South, the current capital raising is squarely focused on advancing Wonarah into production. The Jundee South project faces tenure challenges, including contested forfeiture applications, which the company is actively contesting.

Risks and shareholder impact

Investors should be aware that the rights issue is not underwritten, and there is no minimum subscription. Shareholders who do not participate risk dilution of up to 60%. The company has flagged a range of risks typical for early-stage mining developers, including funding availability, project execution, regulatory approvals, commodity price volatility, and operational challenges.

Avenira’s pro forma balance sheet post-raise shows cash inflows of approximately $48.2 million, boosting net assets to nearly $69 million as at 31 December 2025. The company’s leadership emphasises the importance of this capital raise to secure the necessary resources to transition Wonarah into an operating mine.