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Brightstar Resources (ASX:BTR) has claimed the day’s top faller status in morning Monday trades so far, after unveiling an A$180 million capital raise to shareholders – comprising a $175M institutional placement and a $5M SPP for retail – which wasn’t too popular with HotCopper forum users.
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Looking at price action, forum users weren’t alone in reaching a negative sentiment; shares fell back nearly -21% to match the 50cps placement price; while that isn’t unusual in itself, we definitely didn’t see BTR retain a baked-in premium (think 4D Medical’s (ASX:4DX) sensational capital raise just two weeks ago).
Part of a tempered enthusiasm may be that the company is largely shaking the tin at brokers and not at its retail base, who, typically, can be an easily offended bunch. Especially if they perceive dilution hurting their bottom lines.
It is likely the case that a fall in gold prices over the Week 5 weekend might be causing some caution too; at the time of writing, prices are hovering below US$4,900/oz. They were over US$5,400 only several days ago, meaning that the gold and silver prices are acting a bit like volatile crypto at the moment.
But that’s neither here nor there for Brightstar.
“The near-term development of our Goldfields Hub, as shown in our DFS 2.0, enables Brightstar to underpin its position as an emerging Western Australian gold producer,” BTR MD Alex Rovira said of the raise.
“The calibre of the investors that participated in the capital raising, including some of the most well-credentialled specialist natural resources funds globally, is validation of the quality of our assets.”
The updated Sandstone DFS Rovira speaks of points to a 6Y LOM for 505Koz production with a value of $606M, assuming gold prices of A$6K/oz.
BTR last traded at 50cps.
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