Southern Gold Ltd (ASX:SAU) has received commitments totalling $2 million in a private placement of new fully paid ordinary shares in the company at 2.3 cents per share.
The placement was heavily supported, with applications being scaled back to the targeted $2 million.
The offered price of $0.023 represents a discount of:
- 17.9% on the last traded price of $0.0280 on November 11; and
- 19.9% on the 15-day volume weighted average price of $0.0287.
Southern Gold is set to welcome a number of new sophisticated and institutional shareholders to the company’s register.
The placement was available to investors in Australia who qualified as professional or sophisticated investors under the Corporations Act 2001, as well as sophisticated and professional investors in other select jurisdictions.
Funding on-ground exploration
The fresh cash will be funnelled into:
- on-the-ground exploration activities in South Korea, including drilling which is expected to commence in the first quarter of 2023; and
- early exploratory work in relation to rare earth elements and lithium in South Korea.
The placement was managed by Prenzler Group, with participation by Southern Gold’s two largest shareholders, Metal Tiger PLC (AIM:MTR, OTC:MRTTF, ASX:MTR) and Illwella Pty Ltd.
Details of the placement
The placement consists of two tranches of shares, together totalling 86,956,523 at $0.023 per share, to raise approximately $2 million.
Tranche 1, consisting of 53,332,120 shares, will be completed using existing share issuance capacity and is expected to be issued tomorrow, with quotation to occur on Friday November 18.
Tranche 2, comprised of 33,624,403 shares, is subject to shareholder approval at a general meeting expected to be convened in early January 2023.
The company expects to announce the date of the general meeting and lodge the notice of meeting, in the final week of November.