A rights issue by Flynn Gold Ltd (ASX:FG1) has closed with significant excess demand and strong support from existing shareholders and new investors introduced by the lead manager and underwriter, Mahe Capital, with $2.5 million raised.
Funds raised will be used primarily to advance the company’s Trafalgar high-grade gold discovery at Golden Ridge in Northeast Tasmania.
The company commenced phase 3 drilling at the Trafalgar prospect last month and has a 1,500-metre diamond drill program planned.
"Very good outcome"
Flynn Gold managing director and CEO Neil Marston said, “On behalf of the board, I would like to thank all our shareholders who have participated in this rights issue and to also welcome new shareholders to the Flynn Gold register.
"This is a very good outcome, particularly in these difficult markets and demonstrates enthusiasm for our future. The company now has sufficient funds to embark on growing our gold opportunities in Northeast Tasmania with drilling already underway.”
The renounceable rights issue announced on April 4, 2024, closed on April 30, 2024, raising the full amount of $2,462,114 (before costs). The total includes $1,211,907 from shareholders and $1,250,207 from the shortfall shares placed to existing shareholders and by Mahe Capital.
Flynn Gold will issue 82,070,455 new fully paid ordinary shares and 41,035,227 new options that are exercisable at $0.075 and expire on November 7, 2026. The company will seek quotation of the options on the ASX.
These new securities are expected to be issued tomorrow and commence trading on the ASX on a normal settlement basis from May 8, 2024.
The board has also exercised its discretion to accept a portion of the excess demand to the value of $250,000. Accordingly, the company will issue an additional 8,333,333 shares and 4,166,666 options, on the same terms as the securities issued under the rights issue.