- Rex Minerals (RXM) has received binding commitments to raise $9.5 million through a placement
- Over 39 million shares will be issued to investors at 24 cents per share — representing a 17.2 per cent discount to the last closing price
- Rex will use the money for pre-development and maintenance work at its Hillside project in South Australia and to repay a loan facility it secured early last year
- Remaining funds will be used to cover corporate and admin costs, as well as the cost of the placement offer
- Company shares have dropped 8.62 per cent and are trading at 26.5 cents
Rex Minerals (RXM) has received binding commitments to raise $9.5 million through a placement.
The company will issue about 39.6 million new fully paid ordinary shares at 24 cents per share to institutional and sophisticated investors.
The issue price represents a 17.2 per cent discount to the last closing price and an 8.6 per cent discount to the 10-day volume-weighted average price.
Placement shares are expected to be issued on Friday, April 23.
Rex will use the money for pre-development, maintenance and tenure fees for its Hillside Copper-Gold Project, repaying a loan facility, corporate and admin fees and to cover the costs of the placement.
In February 2020, Rex entered an agreement with a group of 12 lenders to secure a $4.4 million loan facility.
The loan facility, which was extended for 12 months, allowed the company to strengthen its balance sheet while allocating funds towards work programs without needing to dilute shareholders.
Once the loan is paid down after the placement, Rex will have no debt.
"Copper and gold both have strong investment thematics and Rex represents excellent exposure to both through its fully permitted and 'shovel ready' Hillside Copper-Gold Project in South Australia and its low cost heap leach Hog Rang Gold Property in Nevada, U.S.," Managing Director Richard Laufmann said.
The company says its Hillside project fits in well with the South Australian Government's plan to establish the state as a world-leading copper region.
Additionally, the recent mineral resource upgrade and planned drilling at the Hog Ranch project will hopefully unlock even more potential.
Company shares have dropped 8.62 per cent and are trading at 26.5 cents at 11:15 am AEST.