Sunstone Metals Ltd (ASX:STM) has raised $2.5 million through a placement of 500 million new fully paid ordinary shares at 0.5 cents ($0.005) per new share to institutional, professional and sophisticated investors, a 28.6% discount to the last closing price.
Additionally, 250 million options, exercisable at a 50% premium to the offer price, will be issued on a one-for-two basis, subject to shareholder approval.
Funding exploration in Ecuador
Proceeds will go towards the preparation of a maiden mineral resource estimate (MRE) at the El Palmar Copper-Gold Project in northern Ecuador.
Funds will also be channelled into a maiden MRE for the high-grade Limon gold-silver discovery at the Bramaderos Gold-Copper Project in the south of the country, scheduled for next year.
The company is planning to advance partnership discussions and opportunities at both El Palmar and Bramaderos, which it hopes will accelerate exploration and resource growth to unlock the full value of the projects.
Along with the placement, Sunstone will offer all eligible shareholders an opportunity to participate in a share purchase plan (SPP) to raise up to $2 million at the same price as the placement.
Director participation
Directors are also participating in the placement, subject to shareholder approval, for a total of $130,000.
Participants in the placement will receive one free attaching option for every two shares allocated under the placement, subject to shareholder approval.
The option exercise price is 0.75 cents ($0.0075). In addition to the placement, Sunstone will also undertake an SPP at the same price as the placement to raise up to $2,000,000.
Subject to shareholder approval, participants in the SPP will also receive one free attaching option for every two shares allocated under the SPP.
Morgans Corporate Limited and Canaccord Genuity (TSX:CF, LSE:CF) acted as joint lead managers for the placement. Settlement and trading of the new shares are expected to occur on September 13 and 16, respectively.
Sunstone managing director Patrick Duffy said: “We are determined to unlock the true value of our major discoveries at El Palmar and Bramaderos.
“The proceeds of this raising will help us do this by preparing for resource estimates in parallel with partnership discussions.
“We believe this twin-pronged approach will maximise value for shareholders in a highly effective and efficient manner.”