Astro Resources NL (ASX:ARO) has been given an “overwhelming endorsement” of its multi-commodity strategy encompassing the US and Australia through a placement that will raise almost $4.8 million.
After fielding strong placement support from sophisticated investors, substantial shareholder Mining Investments Limited and directors, the company has launched a share purchase plan (SPP) with the intention of raising a further $1.5 million.
Proceeds will be used to accelerate the company’s North American lithium strategy, progress the next phase of IOCG exploration in the Northern Territory and advance its Western Australia mineral sands project.
“I am delighted with the overwhelming response to this capital raising,” Astro’s executive chairman Tony Leibowitz said.
"Astro has a clear strategy to advance its key assets in the USA and Australia, as outlined in our recent market update, and I believe that the strong response both from existing and new investors represents an overwhelming endorsement of our strategy,” he said.
Placement details
Binding commitments have been received from sophisticated investors for 66,628,404 fully paid ordinary shares to be issued at $0.053 per share, raising a total of $3,531,305 (before costs).
In addition, a further 7,307,692 fully paid shares valued at $387,308 in binding commitments have been received, which exceed the company’s placement capacity. Approval for the issue of these shares will be sought at ARO’s next general meeting.
The total amount that sophisticated investors have committed for the placement is $3,918,613.
Director participation
As well the company’s board, led by executive chair Leibowitz, has agreed to subscribe for 6,603,774 fully paid ordinary shares valued at $350,000.
Leibowitz intends to subscribe to $250,000 of shares, with non-executive director John Young and executive director Vince Fayad each intending to subscribe for $50,000 in shares. These shares are also subject to shareholder approval.
Substantial shareholder Mining Investments Limited has also agreed to subscribe for 9,615,384 shares worth $509,615, subject to the receipt of shareholder approval.
These ‘related party placement’ transactions are expected to raise $859,615 and there will be no fees to the company associated with this raising.
SPP for $1.5 million
Astro Resources has also launched an SPP to raise up to $1.5 million before costs, at $0.054 per fully paid ordinary share.
Under the SPP, a total of 29 million fully paid ordinary shares will be offered to eligible shareholders who have a registered address in Australia and New Zealand on the record date being 5.00 pm (AEST) on Wednesday, April 5, 2023.
Eligible shareholders will be able to acquire up to $30,000 worth of fully paid shares under the SPP.
Astro says this will provide existing shareholders with the opportunity to increase their holdings at an attractive price.
“A productive period”
Leibowitz added: “I am confident that, with the proceeds to this capital raising together with the support of our shareholders under the SPP, we can achieve our objective of becoming a major player in the USA lithium industry, as well as unlock the significant value of our Georgina Basin IOCG and Governor Broome Mineral Sands Project in Western Australia.
“This is an exciting time for the company and, with our strategy clearly articulated, I am looking forward to what should be a very busy and productive period for Astro in the months ahead, with regular news flow and updates expected across our three key projects.”
Use of proceeds
Proceeds from the SPP, together with the expected proceeds from the placement, will enable Astro to:
- Expand and accelerate its lithium strategy in the USA, where it has established a significant portfolio of lithium-in-clay assets.
- Progress the next stage of the company’s proposed exploration program for the Polaris and Altair lithium clay projects in Nevada, USA.
- Advance the next phase of IOCG exploration at its Georgina Basin Project in the NT following encouraging recent drilling results.
- Ensure that Astro is fully funded to deliver a mineral resource upgrade and scoping study for its Governor Broome Mineral Sands Project in the last quarter of 2023 or the first quarter of 2024.