Why are Rex Minerals (ASX:RXM) and Essential Metals (ASX:ESS) under the spotlight today?

Summary

  • Rex Minerals, a copper and gold-focused explorer, is raising ~AU$50 million in a placement.
  • The company is eyeing a final investment decision on the Hillside Stage 1 project by end-2022.
  • Essential Metals is undertaking AU$5 million placement to boost lithium exploration at its Pioneer Dome Lithium Project.

Two emerging companies of the mining sector, Rex Minerals and Essential Metals, are raising capital to amplify their ongoing projects and further expand business reach. In this article, we will let you skim through the details of the placements.   

Rex Minerals raising ~AU$50M to advance Hillside project

Rex Minerals Ltd (ASX:RXM), an emerging minerals exploration and development company, has launched a two-tranche placement to raise approximately AU$50 million. Under the placement, ~166.7 million new fully paid ordinary shares will be issued at a price of AU$0.30 per share. The placement price represents a 16.7% discount to the company’s last traded price.

Specifics of the two-tranche placement
The initial AU$5.3 million unconditional placement will comprise 17.8 million new fully paid ordinary shares.

The second tranche or the AU$44.7 million conditional placement will include 148.8 million new fully paid ordinary shares requiring RXM shareholder approval.

Macquarie Capital (Australia) Limited and Euroz Hartleys Limited are acting as joint lead managers and bookrunners to the placement.

Image source: © Drogatnev | Megapixl.com

How is Rex Minerals planning to use the capital raised?
The ASX-listed company will be directing the funds towards pre-development activities at its flagship asset, Hillside Copper Project, which is one of the largest, low-risk, undeveloped copper projects in Australia.

Rex Minerals aims to expand its delivery team at Hillside and build momentum ahead of the target for a final investment decision (FID) for the first stage of the project in 4Q 2022.

The proceeds will also be used to take forward exploration activities at its wholly owned Hog Ranch Gold Property, Nevada, US.

Also read: Four ASX-listed mining stocks that have beaten FY21 guidance  

Essential Metals’ shares jump 7% on AU$5M placement update

Essential Metals Limited (ASX:ESS) is an Australian exploration and mining company operating three strategically located lithium and gold projects in Western Australia.

In the most recent event, ESS has secured firm commitments for a placement of AU$5 million. It will comprise the issue of 40 million ordinary shares at a price of AU$0.125 per share. The placement will enable the company to have a robust balance sheet.

The ASX-listed company plans to use the placement proceeds to boost lithium exploration at its wholly owned Pioneer Dome Lithium Project. This project is highly prospective for lithium-caesium-tantalum (LCT) mineral systems and includes the Dome North Lithium Mineral Resource of 11.2 million tonnes @ 1.21% lithium.

With the completion of the placement, ESS aims to advance its lithium growth strategy and become a new force in the global lithium supply chain.

ESS stock traded at AU$0.145 on 4 August 2021, up 7.407% from its last closing price.

Also read: Top ASX-listed Lithium Stocks || Why is Lithium attracting investors on ASX?

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