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Summary
- The capital raisings marks completion of a milestone and a precondition to the acquisition of Victorian Goldfields
- Share Placement to new and existing investors of 74,700,000 to raise $747,000
- Share placement Plan announced to raise up to $280,000 on same terms as share placement
- Directors commit at least $100,000 through Share Purchase Plan
On 11 June 2020, First Au Limited (ASX:FAU), an advanced Gold and base metals explorer, announced the securing of firm commitments from professional and sophisticated investors to raise a sum of almost $747,000 via placement of up to 74,700,000 fully paid ordinary shares at a subscription price of $0.01 a share. In addition, First Au will float a share purchase plan for its existing eligible shareholders raising up to $280,000 via 28,000,000 ordinary shares.
VicGold Acquisition and Capital Raising to Boost the Pace of Progress
The share placement and purchase program together are a part of the capital raising initiative by First Au aiming to raise up to $1,027,000 to further strengthen its balance sheet and invigorating the cash reserves. On 3 June 2020, First Au had reported the signing of binding agreement to acquire 80% stake in the Victorian Goldfields Pty Ltd.
Victorian Goldfields holds critical Victorian Goldfields project mining tenements applications namely, EL 006975, EL 006976, EL 006977, EL 005422 and EL 006816 in East Gippsland, Victoria. Victorian Goldfields projects stretch over 2,250 square kilometres and include historical mining sites with historical reported mining grades in excess of 1 ounce per ton (>31 grams a tonne of ore). The flagship Haunted Stream application area (EL 006816) is one of the most sought mining grounds of the Lachlan Fold Belt and has indicated a potentially large-scale mineralisation system. The acquisition transition is contingent upon the following factors-
- Completion of due diligence investigations
- New capital raisings of over $1 million by First Au
- Granting of the flagship Haunted Stream license application
With First Au's securing the commitments for the capital raisings marks as an achievement and can be understood as a progression towards the acquisition.
Furthermore, the proceedings from the capital raisings, including the share purchase plan (SPP), would be utilised towards the exploration programs at the Gimlet Gold project, acquisition expense for 80% interest in Victorian Goldfields Pty Ltd (“VicGold”) and for working capital.
Placement Detail: Raising $747,000 through Share Issuance
Under the placement approximately, 25% of the existing issued capital would be raised at an issue price of $0.01, offering a discount of 22.24% against the 5-day Volume Weighted Average Price (VWAP) of 1.28604 cents and a discount of 17.81% against the 15-day VWAP of 1.178149 cents, in comparison to the prices prior to the trading halt on 4 June 2020.
The proceedings from the placements would amount to a gross sum of $747,000, prior to the deduction of expenses related to the placement. The placement has been supported by various sharebrokers and their clients, who have been supporting First Au activities or has been recognised by the company as part of its investor relations. The placement proposal includes the issuance of 44,818,000 placement shares under the Listing Rule 7.1 (15% capacity) and 29,882,000 placement shares under the Listing Rule 7.1A (10% capacity).
The Share Purchase Plan (SPP) Gains Support of the Directors
The existing eligible shareholders can participate in the capital raising program via SPP, a sum of up to $280,000 is expected to be raised through 28,000,000 shares. The eligible shareholders can apply for up to $30,000 worth of new fully paid ordinary shares at $0.01 per SPP share. In case of a shortfall, First Au is open to making the remaining shares available to other professional and sophisticated investors at the discretion of First Au.
The existing shareholders with registered addresses with Australia and New Zealand as at 7.00 PM (AEST) on 10 June, 2020 (Record Date), including the Australian Directors of First AU who have committed to apply for a minimum of $100,000 worth shares via the SPP are eligible for the share purchase plan. The tentative closing date for the SPP is scheduled on 13 July 2020 at 5.00 PM Melbourne time.
With Directors committing a minimum of $100,000 ensures that the interests of the management align with the shareholders and investors for long term value generation.
Fist Au closed at $0.011 a share on 11 June 2020, 10% higher than the issue price as per the placement, with a market capitalisation of $3.29 million.
