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- AuStar Gold (AUL) has lifted its trading halt and announced it is seeking to raise $3.2 million in additional capital from shareholders and investors
- The company will carry out a non-renouncable one-for-ten entitlement offer for eligible shareholders as well as a placement for certain investors
- All of the new shares are worth 30 cents each and every third new share will come with a free attaching option, with an exercise price of 60 cents
- Additionally, AuStar is offering a bonus option for every ten shares held by shareholders on the record date of September 17
- All of the funds raised from this capital raise will go towards expanding the Morning Star Gold Mine
- Shares in AuStar are up 5.71 per cent, trading for 37.5 cents each
Small-cap gold producer AuStar Gold (AUL) has announced it is seeking to raise $3.2 million in fresh capital from shareholders and investors.
AuStar first signalled it was seeking to tap investor for capital earlier this week, when it locked up its shares in anticipation of the fundraise.
The gold producer has since announced the details of the raise, which consists of three different components.
Entitlement offer
Firstly, AuStar will carry out a non-renounceable entitlement offer for eligible shareholders who will receive one new share for every ten already held.
If all of the new shares on offer are taken-up, the company expects to walk away with $1.08 million.
New shares will be offered at a discounted price of 30 cents each, and every third share subscribed for will come with a free attaching option.
The option will have an exercise price of 60 cents, and can be cashed-in before December 31, 2021.
Placement
Alongside the entitlement offer, AuStar will also allow investors to purchase more shares in the company via a placement.
Under the terms of the placement, certain professional, sophisticated and institutional investors are invited to apply for an additional $1.96 million worth of shares.
The new shares will again be priced at 30 cents each, and every third share subscribed for will also come with an attaching option like the entitlement offer.
All of the new shares and options under the placement will be issued to successful investors on September 18.
While the entitlement offer will open the day before on September 17, and close on the planned date of October 9.
Bonus offer
Finally, the board of AuStar has decided to offer bonus options, with one option to be given for every ten shares held at the record date of September 17.
These options have the same exercise price of 60 cents, and expiration date of December 31, 2021, as the options attached to the placement and entitlement offer.
If all goes to plan, AuStar said it will walk away from this capital raise with around $3.2 million in extra funds.
The company has already outlined how it plans to spend the additional cash, with the majority to go towards the Morning Star Gold Mine.
The gold producer wants to carry out drilling at the site, upgrade its mine and shaft dewatering infrastructure and conduct other exploration works.
Shares in AuStar have ended the week up 5.71 per cent, trading for 37.5 cents each.
