Perth-based explorer Globe Metals and Mining (ASX:GBE) is launching an entitlement offer to raise up to $8 million to support development at the Kanyika Niobium Project in Malawi.
The $34.96 million market capitalisation company reports the funds raised from the entitlement offer will be used for technical feasibility work, metallurgical testwork, pilot plant work, and mine and refinery preparation and planning costs for Kanyika, along with director loan repayments, corporate, operation, and marketing costs.
Canaccord Genuity Australia is acting as the lead manager to the entitlement offer and bookrunner to a subsequent shortfall placement if necessary, while Gilbert + Tobin is acting as legal advisor.
The entitlement offer is not underwritten.
Under the pro-rata non-renounceable entitlement offer, eligible shareholders will be able to subscribe for 3 new shares for every 7 shares held as of 14 August 2023 at $0.037 per new share. This price marks a discount of around 47% to Globe Metals’ last closing price of $0.07 on Tuesday 1 August.
The company will issue up to 217.186 million new shares under the offer.
Globe reports its major shareholders Apollo Metals Investment and Triple Talent Enterprises have provided irrevocable commitments to take up their full entitlement under the offer, representing about $4.2 million.
Additionally, Triple Talent has provided an irrevocable commitment to apply for up to $1.3 million of additional new shares under a top-up facility, subject to approval from the Foreign Investment Review Board (FIRB) and Globe shareholders.
Any entitlements not taken up under the entitlement offer will form a shortfall, which is not open to the general public. Globe says investors will be invited by the lead manager to participate in the shortfall and will be provided with a copy of the prospectus and an application form.
Globe reports the entitlement offer will open on 17 August 2023 and close on 31 August 2023, with shares subscribed for under the offer expected to be issued on 7 September 2023.
Settlement and issue of additional shares is expected to occur in late October 2023 following a general meeting to be held on or around 25 October 2023.
“I commend the major shareholders for their ongoing support for the company and encourage all other shareholders to follow their lead and participate fully in this opportunity”
Commenting on the entitlement offer Globe Metals and Mining Chief Executive Officer (CEO) Grant Hudson says: “Following the signing of the MDA, and with a fully shovel-ready project, this entitlement offer, together with the shortfall offer (if any), provides an exciting opportunity for new and existing shareholders to support the continued growth of Globe.
I commend the major shareholders for their ongoing support for the company and encourage all other shareholders to follow their lead and participate fully in this opportunity.
Since 2021, the company has continued to refine its plans, undertaking additional work to update the feasibility study for potential improvements and efficiencies that Globe has identified since the original feasibility study was released, and the company intends to use the funds raised under the entitlement offer to undertake additional work to validate these potential improvements and efficiencies.”
Globe Metals and Mining is a Perth-based explorer focused on its Kanyika Niobium Project in Malawi, which will produce niobium and tantalum products for use in high-strength-low-alloy (HSLA) steels and electronics.
As of 30 June 2023, Globe had $245,000 cash at hand, according to its latest quarterly report published on 31 July 2023.
Write to Harry Mulholland at Mining.com.au
Images: Globe Metals & Mining Ltd