Minerals 260 has opened a non-underwritten share purchase plan targeting up to $30 million at $0.88 a share, the same price paid by institutional investors in its $250 million placement. The broader funding package is intended to move the Bullabulling Gold Project towards construction.
- SPP targets up to $30 million at $0.88 per share
- Issue price matches the institutional placement and carries a 3.5% premium to 10-day VWAP
- Combined $280 million equity raising is supported by $170 million in Franco-Nevada royalty funding
- Eligible Australian and New Zealand shareholders can apply for up to $30,000
- Applications may be scaled back and the SPP is not underwritten
Shareholders offered same price as institutions
Minerals 260 Limited (ASX:MI6) has opened a non-underwritten share purchase plan targeting approximately $30 million, giving eligible Australian and New Zealand shareholders access to the same $0.88 issue price as participants in the company’s $250 million institutional placement.
The SPP can issue up to 34,090,909 new shares. Applications are available in parcels ranging from $2,500 to $30,000, with no brokerage, commission or other transaction costs. At $0.88, the offer matches the closing share price cited by the company before the SPP was announced and represents a 3.5% premium to the preceding 10-day VWAP of $0.85.
Bullabulling moves closer to construction funding
Minerals 260 plans to use the equity proceeds to advance its 100%-owned Bullabulling Gold Project through development and into construction. The stated uses include long-lead items, early works, engineering design, water infrastructure, the owner’s team, exploration, working capital and the costs of the capital raising.
If the placement and SPP raise their expected combined $280 million, the package will sit alongside $170 million of royalty funding secured from Franco-Nevada Corporation and approximately $183 million of existing cash as at 14 September. On the figures disclosed, that represents roughly $633 million of funding before allowing for transaction costs and future expenditure.
Demand, scale-back and dilution remain open questions
The offer is not guaranteed to raise its target. Minerals 260 can accept more or less than $30 million within the ASX Listing Rules, and may scale back applications if demand exceeds the amount the board decides to raise. Any surplus application money from a scale-back is to be refunded without interest.
That discretion matters because the SPP adds a retail component to a substantial institutional raising, while the number of shares ultimately issued will determine the incremental dilution for existing holders. The company may also place any SPP shortfall using its available placement capacity, subject to the applicable rules.
SPP closes on 19 October
The SPP opened on 28 September and is scheduled to close at 7.00pm AEDT on 19 October, although Minerals 260 may close it earlier or amend the timetable. The company expects to announce the result and issue the new shares on 23 October, with ASX quotation proposed for 26 October.
The immediate test is therefore not the offer price but the level of participation and the final share count. A fully subscribed SPP would provide another $30 million for Bullabulling, but the next material marker will be whether that capital translates into visible progress on procurement, early works and the transition from project development to construction.
Bottom Line?
The SPP gives retail holders access to the institutional price, but participation, scale-back and the final share count will determine how much of the proposed Bullabulling funding package is actually secured through equity.
Questions in the middle?
- Will the non-underwritten SPP attract enough demand to meet or exceed its $30 million target?
- How much dilution will the placement and SPP create once the final number of shares is issued?
- When will Minerals 260 provide clearer evidence that the enlarged funding pool is converting into construction activity at Bullabulling?