- Musgrave Minerals (ASX:MGV) has decided to conclude the Share Purchase Plan early owing to encouraging response from MGV shareholders.
- Subscriptions worth $3.2 million has been received for the SPP, which is remarkably higher than the targeted amount of $2 million.
- Musgrave raised $16 million from Share Placement in December 2020.
Australian gold explorer, Musgrave Minerals Limited (ASX: MGV) appears to be delighted with excellent support of investors for its Share Purchase Plan (SPP) Offer. Significantly, SPP has received subscription worth $3.2 million, which is far above the targeted raising amount of $2 million. The subscription amount would be conditional on final reconciliation.
In the view of the upbeat early response to the SPP by the Company’s Shareholders, Musgrave directors have resolved to close the SPP today, as per the SPP terms.
Following the significant update, MGV shares marked an uptick of 5.6%, closing at $0.375 on 13 January 2021.
The support for the SPP ensues successful conclusion of Musgrave’s $16 million Placement, as reported during mid-December 2020 by the Company.
Key Highlights of Early Closure
The Offer was earlier slated to close on 15 January 2021, with the issue of shares expected to occur on 22 January 2021 and trading on the ASX scheduled to commence on 25 January 2021. However, with the applications far exceeding the target, Musgrave has advised that it would not accept any applications received under the SPP after 5 pm (Perth time) on 12 January 2020.
Furthermore, MGV directors will ascertain the scale back of applications according to the SPP Offer document terms and announce further as per the listing rules.
Musgrave anticipates the issue of new shares in the Company because of subscriptions accepted under the SPP. Significantly, the new shares issued will be equal in all respect to the existing shares from their issue date, which is now 20 January 2021.
Details of the Share Purchase Plan
Musgrave offered an exciting opportunity to its eligible shareholders to take part in the capital raising by allowing each shareholder to purchase new shares (fully paid) up to $30,000 worth, regardless of their shareholding size. Furthermore, it would neither incur brokerage nor other transaction costs.
The Offer was not underwritten and had the issue price of $0.36 per new share. The issue price was the same at which investors were issued shares under the Placement in December.
The issue price represents:
- a discount of 15.3% on MGV closing price on the last trading day of shares (on ASX) immediately before the SPP announcement.
- a discount of 13% on VWAP (volume-weighted average market price) of MGV shares of the last five days before the SPP announcement
The Offer was exclusive to eligible shareholders (including custodians), having registered address in Australia or New Zealand and registered as MGV Shareholders as at 5.00 pm (Perth time) on the record date of 11 December 2020.
Use of Funds Paving the Way Forward
The capital raised from Share placement in December and that from SPP will be utilised to increase the pace of exploration and development endeavours at Musgrave’s Cue Gold Project.
Key activities include:
- A roughly 30,000m drilling is aimed at testing several high-grade and high-priority gold targets identified during the recent regional exploration campaign. Notably, resource definition drilling of the White Heat gold discovery would be undertaken.
- Musgrave anticipates to make use of funds in initiating pre-feasibility study (PFS) on the gold deposits of Break of Day and Lena.
- The Company intends to continue studies with the focus to assist in the Mining Proposal approvals.
- New targets would be identified through a further exploration program for further expanding the resource base.
- The Company also plans to use the funds on general working capital requirements, including costs of the Offer.