- Gold explorer Trek Metals (TKM) has abandoned a $2.9 million rights issue, citing “current market conditions” as the reason for the withdrawal
- The 1-for-5 offer would’ve seen up to $2.94 million in CHESS depositary interests (CDIs) issued to fund exploration across Trek’s Pilbara gold portfolio
- Trek still has around $2.35 million in the bank to fund its exploration programs
- Planned exploration including geophysics, drilling and personnel costs will cost around $1.64 million — leaving Trek around $700,000 in the bank
- Trek Metals has fallen 2.60 per cent to 7.5 cents
Trek Metals (TKM) has abandoned a $2.9 million rights issue, citing “current market conditions” as the reason for the withdrawal.
Rights issue
The entitlement offer was withdrawn by mutual agreement with underwriter, Westar Capital.
The 1-for-5 offer would’ve seen up to $2.94 million in CHESS depositary interests (CDIs) issued for 7 cents each.
The funds raised were to be used mainly for exploration across the company’s recently-acquired Pilbara gold portfolio.
The company has given no indication of the number of subscriptions received for the offer.
The withdrawal of the rights issue hasn’t entirely sunk Trek’s exploration aspirations though.
Pilbara gold
Trek still has around $2.35 million in the bank to fund its exploration programs.
The capital raise was designed to provide a buffer, but the company will instead draw on existing cash reserves to fund the next steps across its Pilbara gold portfolio.
The exploration planned with the offer funds included costs of drilling ($918,000), geochemistry and geophysics ($279,000), personnel and consultants ($376,400) and tenement costs ($69,200).
Trek can cover those costs from existing reserves and still keep around $700,000 in the bank.
Trek Metals has fallen 2.60 per cent to 7.5 cents at 3:40pm AEDT.