South Harz Potash Ltd (ASX:SHP) has raised $586,000 in a pro-rata entitlement offer of one new share offered for every 15 shares held by eligible shareholders at an issue price of $0.023 per share.
The entitlement offer follows a recent placement to sophisticated and professional investors at the same issue price that raised A$1.25 million taking the total capital raising to $1.836 million.
To advance Ohmgebirge
Funds raised from the placement and rights issue will be used to finalise the delivery of a pre-feasibility study (PFS) for the Ohmgebirge Potash Project in Germany targeting the use of the brownfield Bernterode shaft infrastructure as the base case development pathway.
The entitlement offer closed on Monday, February 26, 2024, with results as follows:
- 52,005,593 new shares offered under the entitlement offer;
- 21,282,628 new shares (raising $489,500 before costs) applied for by eligible shareholders under the offer, including those subscribing for new shares in excess of their entitlements. This represents approximately 40.9% of all shares offered; and
- a shortfall of 30,722,965 new shares.
Support from directors
Demonstrating their confidence in the company’s potash strategy, directors have underwritten $96,559 of the entitlement offer and subscribed for 4,198,206 shares.
The entitlement offer is partially underwritten for the amount of:
- $50,000 (2,173,902 shares) by chief executive officer Luis da Silva. Mr da Silva will subscribe for 2,173,902 of the shortfall shares;
- $25,506 (1,108,956 shares) by non-executive director Leonard Jubber and his spouse Alexandra Jubber (ATF Jubber Super Fund A/C). Jubber Fund will subscribe for 1,108,956 of the shortfall shares; and
- $21,053 (915,348 shares) by Suitangi Pty Ltd, an entity controlled by non-executive director Seamus Cornelius. Suitangi will subscribe for 915,348 of the shortfall shares.
Allotment of the new shares is expected to occur on Monday, March 4, 2024, with the remaining 26,524,759 shortfall shares to be placed by the board in conjunction with the underwriters in accordance with section 2.6 of the prospectus.
“Appreciate support”
On completing the placement, South Harz managing director and CEO Luis da Silva said: “South Harz Board and management continue to minimise expenditure unrelated to completion of the PFS and appreciate the support of the existing shareholder base, who have demonstrated an unwavering belief in the immense potential value inherent in our flagship Ohmgebirge Potash Project.
“The team is dedicated to advancing this world-class development opportunity and committed to becoming the sustainable European MOP supplier of choice."
Use of funds
Proceeds from the capital raising are planned to be directed towards:
- Completion of the PFS on South Harz’s flagship Ohmgebirge potash development targeting the inclusion of value engineering for the optimised brownfield scenario;
- Complete commercial terms for the existing brownfield infrastructure;
- Consultation for the spatial permitting process;
- Continue engagement with strategic parties, and
- General working capital.
READ: South Harz Potash nears completion of pivotal pre-feasibility study for Ohmgebirge Project
South Harz Potash is a potash exploration and development company with its flagship project located in the South Harz Potash District region of Germany, midway between Frankfurt and Berlin.
Large-scale resource
The South Harz Project hosts a large-scale potash JORC (2012) mineral resource estimate of 5 billion tonnes at 10.6% K2O of inferred resources and 258 million tonnes at 13.5% K2O of indicated resources across four wholly-owned project areas located favourably within central Europe.
With strong established infrastructure proximate to the key European market, the project is well-positioned to enable rapid economic development across multiple deposits.