OD6 Metals Ltd (ASX:OD6) has received firm commitments to raise A$1.5 million, before costs, in a strongly supported equity placement to institutional, professional and sophisticated investors.
The company also intends to undertake a share purchase plan (SPP) to raise up to a maximum of $1 million to give eligible shareholders an opportunity to participate in the capital raising on the same terms as the placement.
Use of funds
Funds raised from the placement and SPP will enable the company to continue to advance the Splinter Rock Project towards development.
Key activities include focused infill drilling primarily at the Inside Centre Prospect, plus extensional drilling targeting mineral resource estimate (MRE) growth, as well as reconnaissance regional drilling.
Proceeds will also be focused on the ANSTO metallurgical program to optimise leach recovery and impurity removal with the aim to produce a mixed rare earth carbonate (MREC), which will enable completion of a scoping study.
“Strong support”
OD6’s managing director Brett Hazelden said: “The Splinter Rock Project has the potential to be a truly world-class project, with strong support being received from new professional and sophisticated investors as well as a number of our long-term retail and institutional shareholders.
"We are also pleased to be able to provide eligible shareholders with the opportunity to participate in the equity raising on the same terms as the placement via a SPP."
Placement details
The placement comprises the issue of approximately 21,126,761 new fully paid ordinary shares 7.1 cents per share to raise A$1.5 million.
There will be 10,881,686 shares issued in line with the company’s 15% placement capacity under ASX Listing Rule 7.1 and 10,245,075 shares issued in line with the 10% placement capacity under ASX Listing Rule 7.1A.
The issue price represents a 18.4% discount to the last ASX closing share price of 8.7 cents on Thursday, March 21, 2024.
Settlement of the placement is expected to take place on Friday, April 5, 2024.
Euroz Hartleys Limited acted as sole lead manager and bookrunner to the placement.
Details of SPP
OD6 will also offer eligible shareholders the opportunity to participate in an SPP at the same issue price to raise up to a maximum of $1 million, before costs.
Eligible OD6 shareholders, being shareholders with a registered address in Australia or New Zealand on OD6’s register as at 5:00pm (AWST) on Monday, March 25, 2024, have the opportunity to apply for up to A$30,000 of SPP shares without incurring brokerage or other transaction costs.
The SPP offer period will open on Wednesday, April 3, 2024, and is expected to close at 5:00pm (AWST) on Tuesday April 23, 2024.
“A busy year” ahead
"Proceeds from the capital raising ensure OD6 is well funded to advance the Splinter Rock Project with a significant focus on the Inside Centre Prospect,” Hazelden added.
"Metallurgical work to be undertaken at ANSTO, will look to optimise our already impressive leach recoveries and low reagent usage, with the next step of producing a high-quality mixed rare earth carbonate, that will enable discussions to be held with various potential strategic partners and off-takers.
"These works will then form the basis and the delivery of a scoping study scheduled for completion by calendar year end.
"We have a busy year to look forward to, as we further derisk our Splinter Rock Project and cement its place as Australia’s premier clay-hosted rare earth project.”