Krakatoa Resources Ltd (ASX:KTA) is set to add an additional $3.78 million to its war chest after receiving firm commitments for the placement of 105 million shares at an issue price of $0.036 per share, and potentially another $1.01 million under an entitlement offer.
The entitlement offer – undertaken on the same terms as the placement – involves a 1 for 13 non-renounceable offer via the issue of about 27.95 million new shares.
The issue price for the placement and entitlement offer represents a discount of 12.2% to the last close ($0.041) and 22.2% to the 15-day VWAP ($0.046).
"Continued support"
“We would like to thank our lead manager CPS for their outstanding service and existing shareholders for their continued support as well as welcome our new shareholders to the register,” Krakatoa Resources executive chair Colin Locke said.
“Furthermore, we are pleased to offer our shareholders the opportunity to participate in the entitlement offer on the same terms as the placement.
“The company is looking forward to drilling the newly discovered Wilson Prospect and unlocking the considerable potential at the King Tamba Lithium Project for shareholders.”
Issue of shares
The company will issue 63 million placement shares in tranche one utilising its placement capacity under ASX Listing Rule 7.1 and Rule 7.1A and 42 million tranche two placement shares will be subject to shareholder approval.
Tranche one is scheduled to be settled on or about Tuesday, July 18, 2023, and tranche two will be subject to shareholder approval at a general meeting to be held in mid-August 2023.
Use of funds
KTA intends to use capital from the placement and entitlement offer to pursue lithium exploration at the King Tamba Lithium Project’s Wilsons Prospect and at the Mt Clere Rare Earth Project.
At Wilsons Prospect, the company recently collected rock chip samples grading more than 2% lithium and up to 1.7% rubidium and 0.5% caesium.
Krakatoa subsequently defined an 800-metre mineralised zone with lithium-tantalum-caesium mineralisation and elevated tantalum-niobium to boot.
The company is now planning a drilling program to better test the lithium mineralisation on the tenure.