Great Boulder Resources Ltd (ASX:GBR) is chasing a A$5 million payday to support resource expansion at the Side Well gold play in WA.
The precious and base metal explorer is guaranteed to raise roughly A$1.5 million thanks to a single tranche placement with high net worth investors, family offices and dedicated resource funds — all of whom have committed to buy shares at 8.2 cents each.
On top of the placement, GBR is launching a partially underwritten one-for-10 entitlement offer, meaning eligible shareholders can buy in at the same price to raise the extra A$3.5 million.
In a show of confidence in the company’s potential, managing director Andrew Paterson and chairman Greg Hall have flagged their intention to participate in the offer.
Together with GBR’s existing cash base, the fundraise will underpin further exploration and drilling across the Side Well property, which already hosts a 518,000-ounce gold resource at 2.6 g/t.
The cash injection will also support a maiden exploration campaign — slated to kick off next month — at GBR’s Wellington base metals camp in the Earaheedy Basin.
De-risking exploration
Great Boulder MD Andrew Paterson said he was pleased to see strong support for the placement — backing that he believes reflects the quality of GBR’s projects.
“We have deliberately scoped this as a relatively conservative raise, which I think is appropriate given the company’s share price,” he explained.
“We are now launching an entitlement offer to existing shareholders to participate in the next phase.
“The issue price represents a 12.5% discount to our 30-day volume-weighted average price, and I urge all interested holders to contact the Automic Group share registry online to ensure they receive their entitlement in time.
“This injection of capital will de-risk our ongoing exploration program at Side Well as well as the initial work at Wellington.
“The company has already recorded some sensational results this year at Side Well and I’m confident the rest of the year will be equally rewarding.”
The fine print
Great Boulder will issue 18.15 million shares to sophisticated and institutional investors, raising A$1.5 million before costs.
Shares are expected to settle on Thursday next week and GBR can choose to issue a further 12-million-odd shares to raise another A$1 million and accommodate excess demand.
Meanwhile, Discovery Capital Partners has committed to underwrite A$2.5 million of the A$3.5 million entitlement offer, wherein shareholders can subscribe for one new share for every 10 held.
Next Wednesday is the offer record date and shareholders have until Friday, April 14 to get their applications in.
GBR will announce the results a week later, with shares piqued to hit shareholder pockets after the weekend and commence trade right after Anzac Day.