Buru Energy Ltd (ASX:BRU, OTC:BRNGF) is aiming to raise $2 million from a share purchase plan (SPP) for its eligible shareholders, effective today.
The SPP follows a strongly supported placement which raised about A$5 million at 11.5 cents per share – reflecting strong market support for the company’s direction and strategy in advancing the Rafael project.
Set at the same issue price, the SPP allows eligible shareholders to acquire up to A$30,000 worth of new fully paid ordinary shares without any brokerage fees.
The funds raised will be used to support the ongoing appraisal and development of the company’s Rafael conventional gas and condensate discovery in the Canning Basin of Western Australia.
Read: Buru Energy secures A$5 million in placement for Rafael development; launches SPP
SPP summary
The SPP will provide all shareholders, who held Buru shares on November 13, 2023, with a registered address in Australia or New Zealand, with the opportunity to apply for shares up to a maximum value of $30,000 at the same price as the placement.
The SPP shares will rank equally with existing shares from their date of issue and carry the same voting rights and entitlements as existing Buru shares.
if demand from shareholders exceeds $2 million, Buru reserves the right to scale back applications or accept oversubscriptions to ensure all eligible shareholders have a reasonable opportunity to participate in the offer.
The offer is expected to close at 5:00 pm AEST on Friday, December 8, 2023, or at such earlier time as the board may elect.
Placement response
Buru’s A$5 million placement attracted significant interest, securing investments from existing major shareholders and new institutional and professional investors.
Commenting on the placement, Buru CEO Thomas Nador said: “The strong support of our major shareholders and new institutional investors for this capital raising reflects the progress we have made on the delivery of our structured program of appraisal and definition of commercialisation pathways of our very exciting Rafael discovery.
“We have demonstrated that there is a pathway to commercialisation for all realistic resource appraisal outcomes.
“We are also systematically progressing our on-ground appraisal activity, having recently completed the Rafael 3D seismic acquisition on time and on budget with preliminary results expected to be available in late November.
“The development of the Rafael conventional gas accumulation can provide much-needed reliable energy for Northern Australia with a materially reduced carbon footprint compared to current systems.
“There is also the potential for clean ammonia production using low CO2 Rafael gas and utilising the significant carbon storage capacity identified by Buru in the Canning Basin proximate to the Rafael discovery.
“We are equally excited about our large exploration acreage applications for natural hydrogen and helium via Buru’s 2H Resources subsidiary, noting the highly encouraging recent initial success of our neighbours in South Australia.
“We are also pleased to provide our wider shareholder base with the opportunity to continue to participate in our journey through the SPP and look forward to their continued support.”