Magnetite Mines adds free options to new $1 million shareholder funding offer

Magnetite Mines opens discounted funding offer

Magnetite Mines Limited (ASX:MGT) has opened a share purchase plan targeting approximately $1 million, giving eligible Australian and New Zealand shareholders access to new shares at a discount while adding a potential option package to the offer. Applications opened at 10.00am on 5 October and are capped at $30,000 per shareholder.

The raising is only partially underwritten. GBA Capital has committed to underwrite $500,000, leaving the final amount dependent on shareholder participation and any scale-back. The company has not yet disclosed the number of shares to be issued, because that will depend on the final price and the level of applications.

Issue price linked to market trading

The issue price will be the lower of $0.015 a share or a price set at a 10% discount to Magnetite Mines’ five-trading-day VWAP calculated at the SPP closing date. The $0.015 reference price represents a 15.8% discount to the 15-trading-day VWAP and an 11.8% discount to the last traded price before the SPP was announced.

That structure gives participating holders a defined maximum price, but the final price remains unsettled until the offer closes at 5.00pm on 16 October. The SPP shares are expected to be allotted and begin normal ASX trading on 23 October, although the company says the timetable is indicative and may change.

Free options require shareholder approval

For every SPP share issued, eligible participants will also receive one free listed option. The options will carry an exercise price equal to a 25% premium to the final issue price, fixed when they are issued, and will expire on 31 December 2029.

The options are not included in the SPP booklet itself. They are being offered under a separate prospectus and will only be allotted if shareholders approve the issue at the expected 30 November annual general meeting. If approval is received, the options are expected to begin trading on 2 December, making the capital raising a two-stage proposition: immediate equity funding followed by potential future dilution if the options are exercised.