Altitude Minerals has lodged a prospectus for a non-renounceable $1.49 million entitlement offer, but warns the issue is ununderwritten and highly unlikely to be fully subscribed. The company is seeking up to $2.6 million in total funding for Nevada drilling, business development and working capital.
- Two-for-three entitlement offer at 0.5 cents per share
- One unquoted option for every two new shares
- Combined capital raising could reach approximately $2.6 million
- Up to 40% dilution for shareholders who do not participate
- Conditional placement requires shareholder approval
Altitude Minerals Ltd (ASX:ATT) has lodged the prospectus for a $1.49 million entitlement offer, with the company itself warning that full subscription is “highly unlikely”. The ununderwritten raising offers eligible shareholders two new shares for every three held at $0.005 per share, plus one unquoted option for every two new shares issued.
Offer Terms and Funding Target
The offer could issue up to 297.4 million new shares and raise approximately $1.487 million before expenses. Each attaching option carries a $0.01 exercise price and expires on 30 November 2028. The options will not initially be quoted on ASX, adding a potential future funding source but no immediate liquidity for holders.
The entitlement offer sits alongside an initial placement of 66.9 million shares targeting approximately $334,587 and a proposed conditional placement of a further 176.1 million shares targeting $880,412. The conditional component requires shareholder approval. If the offer and both placement components proceed at their stated maximums, Altitude expects total capital raising of about $2.6 million after allowing for expenses.
Nevada Drilling Takes Most of the Proceeds
Altitude plans to direct $1.7 million, or 65.4% of the proposed funding, to drilling at its Firenze and Winnemucca projects in Nevada. A further $300,000 is earmarked for business development and $600,000 for working capital. The prospectus gives no earnings forecast, saying the inherent uncertainty of the exploration business prevents the company from preparing a reliable projection.
The pricing is notably below the trading range disclosed in the prospectus. Altitude shares traded between $0.006 and $0.011 during the three months to 11 September, while the new shares are priced at $0.005. That discount may help the company attract subscriptions, but it also sets a demanding test for existing holders deciding whether to commit more capital to an exploration story with no Mineral Resources or Ore Reserves.
Dilution and Funding Risk Remain Central
Shareholders who do not take up their entitlements could face dilution of approximately 40% if the offer is fully subscribed. The capital structure would rise from 446.1 million shares before the initial placement to a potential 986.5 million shares after the full offer and placements. Total options could reach about 564.4 million, before considering any later exercises.
Altitude says it may seek to place any shortfall with existing shareholders or other investors, but the prospectus is explicit that there is no guarantee the shortfall will be absorbed. If funding falls below requirements, the company says it may need further placements, potentially at a discount, or could be forced to consider asset disposals. The immediate milestones are shareholder approval for the conditional placement, the level of entitlement participation and whether drilling converts the proposed Nevada spend into meaningful exploration results.
Bottom Line?
The prospectus puts cash in reach, but the investment case now depends on participation levels, approval of the conditional placement and results from the Nevada drilling it is designed to fund.
Questions in the middle?
- How much of the $1.487 million entitlement offer will shareholders actually take up?
- Will shareholders approve the further $880,412 conditional placement?
- Can the Firenze and Winnemucca drilling programs produce results that justify the expanded capital structure?