KGL Resources (ASX:KGL) has launched an entitlement offer seeking about $20.2 million to support development at the Jervois Copper Project in the Northern Territory.
The company reports the proposed entitlement offer is a 10 for 27 pro-rata traditional non-renounceable entitlement offer of fully paid ordinary shares in KGL.
This entitlement offer is not underwritten and is also subject to a minimum raise condition of $9 million.
Additionally, 3 of KGL’s major shareholders, KMP Investments, entities associated with Denis Wood, and Marshall Plenty Investments, have committed to take up their respective entitlements in full, which provides funding of $8.6 million.
The funds raised in the entitlement offer will be used to fund project development and ongoing expansion of the resource at Jervois, following on from a Feasibility Study completed in November 2022.
Currently the company is working on mine plan optimisation and tender for contracts with contractors for construction, mining, and operations. KGL is also implementing a risk management plan, which is considered ‘critical’ to being able to meet delivery timelines and desired outcomes.
“We completed the Feasibility Study in November 2022, and since that time have been working on de-risking and preparing for the project”
Commenting on the entitlement offer, KGL Resources Executive Chairman, Denis Wood says: “We completed the Feasibility Study in November 2022, and since that time have been working on de-risking and preparing for the project.
We also recommenced drilling in March 2023 with some exciting targets to explore. Proceeds from the offer, if fully subscribed, will allow the company to continue with these activities well into 2024.
My opinion is that the current share price is well below the intrinsic value of the company, especially considering the forthcoming copper shortages the world faces. We have sought to structure the offer in such a way that is fair to all shareholders.”
The company also notes it will notify shareholders as to whether they are eligible to participate in the offer. Eligible shareholders will receive an offer information booklet, including a personalised entitlement and acceptance form, which will provide further details of how to participate in the offer.
KGL reports the entitlement offer will close on 18 May 2023, with results expected to be announced on 23 May. Settlement of shares will also occur on 24 May, with normal trading on the ASX starting on 26 May.
KGL Resources is an Australian mineral explorer and developer focused on the delineation and development of the ‘high-grade’ resource at the Jervois Copper Project, located in the Northern Territory.
Images: KGL Resources Ltd
