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  • Stellar Resources (SRZ) has received firm commitments to raise $2.17 million in additional capital via a placement and entitlement offer
  • Under the placement, shares were priced at 1.1 cents each with over 27 million shares to be issued
  • While under the entitlement offer, shares were priced at 1 cent each with two new shares to be offered for every five already held by eligible shareholders
  • Three of the company's directors have subscribed for $30,000 worth of shares under the entitlement offer, while any shortfall will be picked up by the underwriter
  • The funds from the capital raised will go towards exploration works at Stellar's various projects, including its North East Tasmania gold exploration program
  • Stellar's shares have slumped since the trading halt associated with the fundraising lifted, with the share price dropping over 20 per cent
  • Shares in Stellar ended the day down 21.1 per cent at 1.5 cents each

Tin explorer and developer Stellar Resources (SRZ) has received firm commitments to raise $2.17 million in additional capital via a placement and entitlement offer.

Stellar first announced its intention to tap investors and shareholders for fresh capital last week when it entered a trading halt.

The Placement

Of the more than $2 million raised, $300,000 came from the placement to sophisticated, professional and other exempt investors.

Under the placement, shares were priced at 1.1 cents each with over 27 million shares to be issued to investors.

The issue price represents a 35 per cent discount to the 30-day volume-weighted average price of 1.7 cents each.

Stellar said it expects the placement's shares to be settled on Tuesday, September 15.

The Entitlement Offer

Alongside the placement, Stellar also announced it would undertake a non-renounceable entitlement offer, with shareholders able to subscribe for two new shares for every five already held.

However, under the entitlement offer, the issued shares were discounted even further than those offered under the placement — at 1 cent each.

Over 187 million shares will be issued under the entitlement offer, to raise around $1.87 million in capital.

Additionally, the offer was fully underwritten by Taylor Collison, with three of Stellar's directors also acting as sub-underwriters.

The same directors, Simon O’Loughlin, Simon Taylor and Thomas Whiting, have subscribed for their full allotment of new shares under the entitlement offer.

While Taylor Collison has agreed to pick up any shortfall shares, with the entitlement offer to close on October 6.

The Fundraise

Stellar said it will use the majority of the $2.17 million in funds raised for further exploration works at its projects.

Specifically, the money will help fund the company's North East Tasmania gold exploration program — subject to the granting of ten exploration licences.

"The capital raising is a very positive outcome for the company and will enable us to progress with our gold exploration program in North East Tasmania," Stellar Chairman Simon O’Loughlin said.

Since the trading halt associated with the capital raise has lifted, shares in Stellar Resources have slumped.

SRZ's share price dropped over 20 per cent during trade today, to close down 21.1 per cent at 1.5 cents per share.

SRZ by the numbers
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