Perth-based mineral explorer Westar Resources (ASX:WSR) has raised over $2.16 million through an oversubscribed shortfall for its entitlement offer, which was first launched on April 6.
The company says it will use the cash boost to fund exploration at its base and precious metal projects in Western Australia.
Westar initially sought $2.78 million in the entitlement offer, but when it closed on 2 May, the company had only received subscriptions for just over $567,000 — a take-up of just 20%. As such, it launched the shortfall offer, which it says was oversubscribed.
The company reports under the shortfall offer, over 72 million shares worth $2.16 million have been placed to existing and new shareholders, along with sophisticated investors.
The remaining shortfall of nearly $40,000 for over 1.33 million shares will be issued to Westar Resources Executive Director Lindsay Franker, subject to shareholder approval at an upcoming meeting on 29 May 2023. Following ‘significant’ interest in the shortfall, Franker agreed to scale back his original $50,000 application.
Additionally, Westar will issue a free attaching option for every 3 shares issued as part of the shortfall. These options are exercisable at $0.045 until 5 May 2025.
The capital raised from the shortfall and entitlement offer will be spent on exploration at the Olga Rocks, Mindoolah, and Gidgee North projects, along with general working capital and funding the cost of the entitlement offer. Olga Rocks is considered prospective for pegmatites, along with gold and base metals.
Commenting on the capital raise, Westar Resources Executive Director Lindsay Franker says: “It is encouraging to see such strong demand in the shortfall from the recent entitlement offer.
“The placing of the shortfall positions the company with significant cash reserves to continue to pursue exploration on its projects”
The placing of the shortfall positions the company with significant cash reserves to continue to pursue exploration on its projects, with focus on the recent drilling at Olga Rocks showing encouraging pegmatite intersections.”
News of the oversubscribed shortfall follows a stellar share price run for Westar, which soared from $0.0375 on 19 May to touch $0.095 on 23 May — despite the company releasing no price-sensitive news during this period.
The company received a speeding ticket from the Australian Securities Exchange (ASX) on 23 May, noting Westar’s share price performance and a ‘significant’ increase in the volume of securities traded from 22-23 May 2023.
Westar attributed the rise to its announcement of fresh drilling intersections at its Olga Rocks Lithium-Gold Project in Western Australia on 15 May.
Westar Resources is an Australian mineral exploration company focused on its future and precious metal assets in Western Australia. The company holds the Opaline Well, Mindoolah, Gidgee North, Winjangoo, Mt Finnerty, and Olga Rocks projects in Western Australia.
Write to Harry Mulholland at Mining.com.au
Images: Westar Resources Ltd