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Summary
- Platinum group metals focused company, Podium Minerals has announced capital raising. POD shall raise around $1 million in total, divided equally into Placement and Share Purchase Plan(SPP).
- POD aims to advance its growth and development strategy of its fully owned Parks Reef PGM Project.
- Company pulling right strings to enhance the value proposition.
Exploration and resources development company, Podium Minerals Limited (ASX:POD) is primarily focused on platinum group metals, gold as well as nickel-copper sulphides, with its flagship Parks Reef project located within its granted mining leases in the Mid-West Region of Western Australia.
Details of the Capital Raising
The Company shall raise $1m by way of a share Placement and SPP, distributed as:
- $500k Placement to sophisticated investors through issue of 31.25 million new shares at an issue price of 1.6 cents per share
- $500k SPP allowing existing shareholders to participate in the capital raising at the same price as the Placement by issuing up to 31.25 million new shares
Furthermore, the directors of the Company have also put forward their intention to take part in the SPP to a minimum amount of $90,000, while the Company has received funds from qualified sophisticated investors for $500,000 through the issue of new fully paid ordinary shares in POD.
The additional SPP has been announced to offer an opportunity to existing shareholders of POD to participate in the capital raising at the same price as the Placement. The shareholders can apply for a maximum of $30,000 of new shares at a price of 1.6 cents per share without any brokerage or other transaction costs.
The schedule regarding the various stages of the Share Purchase Plan have been outlined by the POD as follows:
Source: Company's Report
The issue price of the SPP and the Placement:
- A 24% discount to the volume-weighted average price (VWAP) of the Company’s shares over the last 15 days on which sales of shares were recorded prior to 27 May 2020
- A 38% discount to the last traded closing price of the Company's shares on 27 May 2020
Podium has been considerate of current market conditions in determining the issue price of its securities under the Placement and the SPP while enabling shareholders to share the growth prospects of the Company.
Utilising Funds
POD looks forward to employing the proceeds from the capital raising towards the advancement of its 100% owned extensive Parks Reef PGM Project and cement its growth strategy. The capital raising announced by the Company is part of the funding strategy for the work programmes and shall offer immediate funds while allowing the Company to initiate the next stage of drilling as soon as possible.
Moreover, POD’s planned clear work programmes identify a credible pathway to production for the Parks Reef Project including:
- Progressive, systematic drilling along the full 15km strike length of Parks Reef with the goal of delineating a materially significant resource base
- Testwork and process design to select a preferred process route
- A scoping study to define a project development plan
Plans For Rapid Value Creation (Source: Company's Report)
Further, the Company can offer additional funding for the work programmes with the intention of monetising the value of its investment in unlisted company EV Metals Group plc, where POD presently holds around 16.4 million shares (17% interest), which would lessen dilution for shareholders.
Presently, EV Metals owes around $707,000 for its share of joint tenement costs to POD and has intimated POD about the likeliness of completing substantial fundraising which shall enable EV to repay funds owed to POD in the short term.
Additionally, EV Metals has intimated that as part of its fund raising it has identified investors who are interested in procuring POD’s shares in EV Metals. Podium has inked an agreement with EV Metals allowing EV Metals to place all of Podium’s shares in EV Metals for a total value of not less than $2.2 million or pro-rata part thereof.
Podium owns 100% of the Parks Reef Mineral Resources while EV Metals holds rights to the Oxide Minerals within Podium’s Western Australian tenements through its wholly owned subsidiary Ausinox Pty Ltd.
Value Proposition
The various value propositions highlighted by Podium Minerals Limited are as follows:
- Systematic drilling at Parks Reef efficiently delivered:
- Mineral Resources containing 1,140,000 ounces 3E PGM and 37,300 tonnes copper over 6.9km of strike and within 100m of surface (less than 25% of Exploration Target envelope)
- Exploration Target over the full 15km strike length of 3.1 to 5.8 million ounces 3E PGM within 200m of surface (including 1.5 to 2.6 million ounces within 100m of the surface)
- Exceptional platform for the development of a strategic Australian PGM supply:
- Executed Native Title Agreement with secure tenure and granted mining leases
- Available options around production rates and mine life provided by large tonnage deposit
- Simple, low-cost open-pit mine can be enabled through near-surface mineralisation
- Well-developed infrastructure with closed road access to multi-commodity port facilities at Geraldton
- Clear work programmes to define the optimal pathway to production, including resource extension drilling at depth to unlock the complete value of Parks Reef and other activities highlighted above.
- Multi-year upward price trend has been driven by a supply-constrained PGM market.
Current PGM spot prices as per Bloomberg ( 9/6/20)
Platinum US$ 840oz
Palladium US$ 2022oz
Rhodium US$ 6200oz
Gold US$ 1700oz
- Resource development and delivery of a pathway to production offer the possibility of substantial value creation. The current market cap of circa $ 3.08 million attributes less than $4 per ounce of Resource.
The Company is optimistic about continued drilling through the capital raising, with the opportunity to sell the investment in EVM to finance additional work programmes are continuing.
POD stock closed at $ 0.019 with a market capitalisation of $ 3.08 million (as on 9 June 2020).
