Gold and copper explorer Sierra Nevada Gold (ASX:SNX) is aiming to raise about $2.8 million under a non-renounceable rights offer to fund exploration at its 5 projects in Nevada, US.
Under the rights offer, the $6.21 million market capitalisation company reports eligible shareholders can subscribe for 5 new chess depositary interests (CDI) for every 8 CDIs held on 31 July 2023 at $0.08 per CDI.
This offer price represents a 22.96% discount to Sierra’s 5-day volume weighted average price (VWAP) of $0.104 for the period up to 25 July 2023, a 27.27% discount to its last trading price of $0.11 on 25 July 2023, and a 15.5% discount to its theoretical ex-rights price (TERP) of $0.095.
This rights offer is not underwritten, and Foster Stockbroking is acting as lead manager to the rights offer.
Sierra Nevada reports its directors unanimously support the rights offer, and all directors that hold Sierra Nevada CDIs intend to take up some of all of their pro-rata entitlement.
Funds raised through the rights offer will be used to pay direct exploration costs, project costs, and general working capital and to cover the costs of the rights offer.
The company says any new CDIs not applied for under the offer will be offered to eligible CDI holders, who will be able to apply for additional new CDIs more than their entitlement at the same offer price.
Shortfall CDIs will be issued under a shortfall offer at the sole discretion of Sierra Nevada’s directors, and there is no guarantee eligible CDI holders will receive shortfall CDIs.
Sierra Nevada reports the record date for the rights offer is 31 July 2023, and the offer will be open from 3 August to 17 August 2023. CDIs subscribed for under the offer will be issued on 23 August 2023 and will begin trading on 24 August 2023.
Sierra Nevada Gold is an ASX-listed gold and copper explorer focused on developing its 5 projects in Nevada, US. These projects include the Blackhawk, Colorback, Warrior, and New Pass projects, along with a grassroots generative program to detect large-scale hydrothermal systems within the Walker Lane Trend.
On 31 May 2023, the company started discussions with several parties regarding a potential partnership to advance exploration at Blackhawk, allowing Sierra Nevada to focus on exploration and development at Warrior.
Write to Harry Mulholland at Mining.com.au
Images: Sierra Nevada Gold Inc