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Highlights:
- Xanadu Mines raises $5.5 million via placement of 100 million shares.
- Zijin Mining to be offered the opportunity to maintain its 19.4% stake through participation.
- Funds will support Red Mountain Copper-Gold and Sant Tolgoi Nickel-Copper projects.
Xanadu Mines Ltd (ASX:XAM, TSX:XAM), an emerging player in the mining industry with a focus on copper and gold exploration, has successfully secured commitments for a placement to eligible professional and sophisticated investors. The company will issue 100 million fully paid ordinary shares (New Shares) at an issue price of $0.055 each, raising approximately $5.5 million before costs. The placement is unconditional and will utilize Xanadu’s existing placement capacity under ASX Listing Rule 7.1.
The capital raised from this placement will primarily fund Xanadu's ambitious growth strategy, which includes advancing its flagship Red Mountain Copper-Gold Project and Sant Tolgoi Nickel-Copper Project. In addition to these exploration endeavors, the funds will be used for acquiring new projects, exploration activities, and working capital. The company is also preparing for the first-quarter 2025 activities related to the Khuiten Joint Venture (JV), which will include work prior to the commencement of a feasibility study.
In addition to the placement, Xanadu has entered into a consultation period with Zijin Mining, a major global mining player, following the delivery of the Kharmagtai Pre-Feasibility Study. As part of these discussions, Zijin Mining, which currently holds a 19.4% interest in Xanadu via its subsidiary, Jinping (Singapore) Mining Pte Ltd, will have the opportunity to participate in the placement on a pro-rata basis to maintain its existing shareholding. This participation would be contingent upon formal documentation, internal approvals, and shareholder and regulatory approvals.
The placement is priced at $0.055 per share, which represents a 14.1% discount to Xanadu’s last closing price of $0.064 per share as of October 31, 2024, and a 16.7% discount to the 5-day volume-weighted average price (VWAP) of $0.066 per share. While the issue price reflects a discount, the strategic use of the funds is designed to enhance Xanadu’s growth trajectory and operational capabilities.
Xanadu has enlisted Ord Minnett and Bell Potter Securities Limited as Joint Lead Managers to the placement, with MST Financial and PAC Partners acting as Co-Managers. The new shares will settle on November 7, 2024, and are scheduled for allotment and trading on November 8, 2024. A separate announcement will follow if further placements are made to strategic parties, including Zijin, following the completion of required documentation and approvals.
In summary, this capital raise is a pivotal step in Xanadu Mines’ expansion and exploration initiatives. With strong backing from investors and the potential participation of Zijin, Xanadu is poised to advance its key projects and continue its upward trajectory in the copper-gold and nickel-copper sectors.
