Forrestania Resources (ASX:FRS) has launched an Entitlement Offer to raise about $1.94 million to advance its portfolio of projects in Canada and Western Australia.
Under the terms of the fully underwritten offer, eligible investors can subscribe for 2 new shares for every 5 already held at $0.07 per share.
The company intends to put the proceeds towards advancing exploration and drilling programs at its Forrestania and Eastern Goldfields Projects in Western Australia, alongside formalising and progressing its recently announced Joint Venture (JV) with ALX Resources (CVE:AL) over the Hydra Lithium Project in the James Bay region of Canada.
RMC Corporate Finance has been appointed as lead manager and underwriter to the offer, which has been made available to all shareholders registered at 5pm AWST on 2 June 2023. The Offer will close at 5pm AWST on 21 June 2023.
Forrestania says eligible shareholders will receive 1 free option for every share subscribed for and issued. Each option will have an exercise price of $0.15 with an expiry date of 30 June 2026.
The issue price of $0.07 per share is a 9.7% discount to the company’s 10-day VWAP of $0.078 per share and an 11.6% discount to its 30-day VWAP of $0.079.
Additionally, eligible shareholders may apply for new shares and options not subscribed for by other eligible shareholders pursuant to the offer on the same terms as the Entitlement Offer.
Commenting on the Entitlement Offer, Forrestania Resources Managing Director Michael Anderson says: “Having recently expanded our portfolio in Western Australia and extended our reach into the James Bay region of Canada, the company now has significant discovery potential in 2 of the world’s most fertile lithium exploration jurisdictions.
With 3 highly prospective projects to progress at Forrestania, Eastern Goldfields, and Hydra, we are focused on working systematically and proactively, and this funding will allow us to do justice to the potential that we see.
“We are focused on working systematically and proactively, and this funding will allow us to do justice to the potential that we see”
We are excited that the fieldwork will start in Canada in just a few days’ time, and when combined with our ongoing work at Forrestania and in the Eastern Goldfields, we expect to deliver substantial news flow over the coming months from all 3 projects.”
For the Forrestania Project, the funding will allow for follow-up drilling to be carried out. Meanwhile, at the Eastern Goldfields Project, geological mapping and sampling are planned, as well as the definition of targets for a maiden drill program.
The company adds that fieldwork has already begun at the Eastern Goldfields and will be continuing over the coming months, with results of initial sampling expected shortly.
The remaining funds, after spending a portion on the JV Hydra Lithium Project, will be used for general working capital purposes and to meet the fees and expenses of the offer.
On 8 May 2023, Forrestania announced an expansion of its lithium exploration focus in the James Bay region. Additionally, an agreement has been reached with ALX for Forrestania to earn a 50% interest in and form a JV over the Hydra Lithium Project.
Forrestania Resources is an exploration company focused on its search for lithium, gold, and nickel in Western Australia and the James Bay region of Quebec, Canada. The company’s portfolio of assets includes the Forrestania, Southern Cross, and Leonora Projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Forrestania Resources Ltd
