- Minerals explorer King River Resources (KRR) has offered shareholders a security purchase plan (SPP) aiming to raise over $12.3 million
- The company says the money will be used to fund ongoing project development and exploration, and for general working capital
- Shares will be offered at 3.3 cents each, with one free attaching option exercisable at six cents for every three shares purchased
- The company’s reasons for the capital raise are somewhat enigmatic — with no specifics offered as to which projects will be funded or for what purpose
- The company’s share price has more than halved since its recent high on May 20, and now sits just below the SPP price
- It’s suddenly looking like a mountain to climb for KRR if the deal requires shareholder approval and the offer is far from tempting
- King River has taken a dive today, trading 15.8 per cent lower at 3.2 cents per share
Minerals explorer King River Resources (KRR) has offered shareholders a security purchase plan (SPP) aiming to raise over $12.3 million.
The company says the money will be used to fund ongoing project development and exploration, and for general working capital.
The offer
Shares will be offered at 3.3 cents each, with eligible shareholders able to purchase up to $30,000 worth of shares.
The offer will also include one free attaching option for every three shares issued exercisable at six cents and expiring on July 31, 2022.
King River will hold a shareholder meeting as soon as possible before the proposed open date of July 7 as the offer requires shareholder approval to go ahead.
The price of 3.3 cents represents a 20 per cent discount to the five-day volume-weighted average price and an 18.5 per cent discount to the last closing price on June 22.
The money
The company’s stated reasons for the capital raise are somewhat enigmatic — with no specifics offered as to which projects will be funded or for what exact purpose.
Either the company is having some liquidity issues as it continues testing and development for the Speewah project pre feasibility study (PFS), or the company is offering its shareholders a chance to buy in before an expected boom. Or maybe there’s some other reason?
Without engaging in pure conjecture, it suffices to say it’s not often an attempted $12 million capital raise comes with such scant justification.
The company’s last release seemed to show progress at Speewah without mentioning funding speedbumps, so the current situation is a little curious.
The company’s share price has more than halved since its recent high on May 20, and now sits just below the SPP price.
It’s suddenly looking like a mountain to climb for KRR if the deal requires shareholder approval and the offer is far from tempting.
Maybe positive progress on the Speewah PFS might turn things around.
King River has taken a dive today, trading 15.8 per cent lower at 3.2 cents per share as at 1:35 pm AEST.