Forrestania Resources Ltd (ASX:FRS) has raised more than A$1.935 million in a well-supported entitlement offer with funds to help advance critical minerals exploration at the Forrestania and Eastern Goldfields projects in Australia as well as to progress a new joint venture on Hydra Project in Canada’s James Bay region.
The entitlement offer, which closed on June 21, 2023, was made to eligible shareholders on the basis of two new fully paid ordinary shares for every five shares held on the record date, at $0.07 per share.
It also includes one free option for every one new share with an exercise price of $0.15 each on/or before June 30, 2026.
The entitlement issue was fully underwritten by RM Corporate Finance Pty Ltd.
Support for offer
Forrestania received total applications for 13,326,466 shares valued at $932,853 and applications for a further 10,795,769 shares valued at $755,704 under the shortfall offer.
The balance of 3,529,286 shares valued at $247,050 will be allocated to the underwriter (or its nominees) in accordance with the underwriting agreement, taking total offer proceeds to $1,935,607.
Company directors have thanked shareholders who participated in the entitlement offer for their ongoing support of the company.
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.
A portion of the funds, around 20%, will also be used to make payment to 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.
“Significant discovery potential”
In launching the offer on May 29, 2023, managing director Michael Anderson said: “Having recently expanded our portfolio in WA and extended our reach into the James Bay region of Canada, the company now has significant discovery potential in two of the world’s most fertile lithium exploration jurisdictions.
"With three highly prospective projects to progress at Forrestania, Eastern Goldfields and Hydra, we are focused on working systematically and proactively, and this funding will allow us to do justice to the potential that we see.
"We are excited that fieldwork will start in Canada and when combined with our ongoing work at Forrestania and in the Eastern Goldfields, we expect to deliver substantial news flow over the coming months from all three projects.”