Forrestania Resources Ltd (ASX:FRS) has finalised a capital raising for proceeds of $1.935 million, most of which will help fund work programs at projects in Western Australia and Canada.
A pro-rata entitlement offer, which closed recently, has been finalised with the shortfall amount allotted to clients of the lead manager and underwriter, RM Corporate Finance Pty Ltd.
Applications were received by Forrestania for 24,122,235 new fully paid ordinary shares under the offer from existing shareholders, raising approximately $1.688 million (before costs).
The offer was fully underwritten and the shortfall of 3,529,286 shares has now been placed which raised an additional amount of approximately $247,000 (before costs).
Funds will be “put to good use”
Managing director Michael Anderson said: “The company would like to thank everyone who participated in the offer for their support.
"We intend to put the funding to good use across our portfolio of projects in both WA and Canada and we look forward to keeping everyone informed of our progress.”
READ: Forrestania Resources raises A$1.935 million to support lithium progress in WA and Canada
Offer details
For each new share applied for, shareholders are issued with a free attaching quoted option. The new shares and options that have been applied for under the shortfall have been allotted.
These new shares will rank equally with existing ordinary shares on issue. Each option will be in the same class as the company’s newly quoted options (ASX:FRSOA) which have an exercise price of $0.15 per share and an expiry date of June 30, 2026.
Directors also demonstrated their confidence in the company’s strategy by committing to subscribe for entitlements and priority sub-underwriting agreements in the offer for a total of $194,000.
Use of funds
Around 52% of proceeds, or $1 million, will help fund the company’s ongoing exploration in Western Australia.
At its namesake project in WA priority lithium targets to be drilled include Giant, Calypso and South Iron Cap East prospects.
In the Eastern Goldfields, the focus will be on defining drill targets on multiple known pegmatite outcrops, including at Balarky Prospect.
Around 20% of the funds raised will also be used to make payment to ALX Resources Corp (TSX-V:AL) (ALX Resources Corp (TSX-V:AL)) as part of the consideration to formalise the proposed joint venture on the Hydra Lithium Project in the James Bay Region of Quebec, Canada.
The remaining proceeds will be used for general working capital purposes and to meet the fees and expenses of the offer.