- Sihayo Gold (SIH) has announced it will be undertaking a capital raise to raise up to $38.8 million
- The money will be raised through a $19.7 million placement and a $19.1 million non-renounceable entitlement offer
- Once the capital raise is completed, Sihayo will be able to fund systematic exploration works at its Sihayo Starter Project
- The company will also be left debt-free with a strong balance sheet
- Sihayo has ended the day with no change and shares trading for 3.2 cents each
Sihayo Gold (SIH) has announced it will be undertaking a capital raise to raise up to $38.8 million.
The money will be raised through a two phased placement and a non-renounceable entitlement offer.
Placement
For the placement, Sihayo will aim to raise $19.7 million through two phases.
Phase one will consist of 572,466,065 shares being issued to sophisticated and institutional investors at a price of 2.5 cents each to raise $14.3 million.
The settlement is expected to occur on August 28.
Phase two, which is subject to shareholder approval, will see 217,121,951 shares be issued at a price of 2.5 cents each to raise the remaining $5.4 million.
Sihayo has already received binding commitments from Indonesian mining company Merdeka, Non-Executive Director Gavin Caudle, and Executive Chairman Colin Moorhead for this phase.
Once phase two is complete, Merdeka will become a new strategic shareholder with an anticipated shareholding of 7.1 per cent.
Furthermore, joint underwriters Argonaut Capital, Bell Potter, and CLSA have agreed to underwrite phase one of the placement.
Entitlement offer
The remaining $19.1 million will be raised through a one-for-three non-renounceable entitlement offer.
Sihayo has recommended that all eligible shareholders and Directors take up their entitlements.
Key shareholders have already provided binding pre-commitment to participate in the offer with an estimated value of $8.1 million.
The joint underwriters have also partially underwritten the entitlement offer to $1.3 million, and have received shortfall and pre-commitments totalling $12.3 million.
Once the capital raise is completed, Sihayo will be able to fund systematic exploration works at its Sihayo Starter Project.
The company will also be left debt-free with a strong balance sheet.
“In our view, the Sihayo Starter Project is very attractive in the current gold price environment, and upcoming exploration has the potential to re-shape the company,” Colin commented.
“This capital raising is an excellent outcome for Sihayo. Post completion of the capital raising, Sihayo will be in a materially stronger financial position to execute ist near to medium-term strategy,” he added.
Sihayo has ended the day with no change and shares trading for 3.2 cents each in a $73.27 million market cap.