Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF) has received firm commitments from leading international and domestic institutions to raise $15 million in an institutional placement.
The company has also opened a standard non-renounceable entitlement offer to eligible shareholders to raise up to $5.2 million in additional funding.
ASM expects strong interest in the entitlement offer, as it has already received pre-commitments for $1.4 million.
Moving toward final investment decision
“We are delighted with the response from existing and new investors to the placement, which reflects the quality of our projects and their potential to deliver significant value for our shareholders,” Australian Strategic Materials managing director and CEO Rowena Smith said.
“I would like to take this opportunity to thank both existing and new investors for their support.
“The funds raised under the offer will go towards demonstrating ASM has the required co-commitments to enable government funding that will be used to progress key critical path activities to take a final investment decision for ASM’s Dubbo Project.
“The market’s response has been very encouraging, and we are looking to capitalise on this momentum to accelerate progression towards FID.”
Strong support for offer
The entitlement offer is being strongly supported by ASM’s existing major shareholders demonstrating their continued support for the company and the long-term value proposition offered by the development of its key projects.
ASM has secured formal commitments from major shareholders, including from Ian Gandel, the company’s chair and major shareholder, via his investment entity Abbotsleigh Pty Ltd, totalling minimum subscriptions of approximately $1.4 million in the entitlement offer.
The combined raised funds will primarily go to demonstration of co-commitments for government funding at the Dubbo Project, as government support is critical for path items associated with taking the company to a final investment decision.
ASM is developing the Dubbo Project as a vertically integrated critical mineral source with an initial mine life of 20 years, holding a total resource of 75.18 million tonnes at 1.89% zircon, 0.04% hafnium, 0.44% niobium, 0.03% tantalum and 0.14% yittrium with a total rare earth oxide content of 0.74%.