Fortress Minerals OAJ is seeking to raise $9 million via a proposed placement of up to 23.3 million shares. After deducting estimated fees, the net proceeds of the placement will be at $8.7 million.
The company entered into a placement agreement with Stirling Coleman Capital on March 20 where the latter, as the placement agent, will procure placees to subscribe to the placement shares.
The shares will be issued at 38.6 cents apiece, representing a discount of 9.9% to the volume-weighted average price of 42.84 cents per share for trades done on March 16. March 16 is the last full market day where shares in Fortress Minerals were signed before the signing of the placement agreement and before Fortress Minerals’ trading halt on the morning of March 17.
The placement price was agreed between Fortress Minerals and Stirling Coleman after negotiations. The price also factored in Fortress Minerals’ historical trading performance, prevailing market conditions and its future prospects.
The placement shares represent 4.66% of the existing shares in the company and 4.46% of the company’s enlarged share capital. They will not be placed to a director or substantial shareholder of the company.
The proceeds of the proposed placement will partly fund Fortress Minerals’ exploration efforts in Sabah. The company had received new prospecting licenses in Sabah on March 6. “The exploration of new geographies and minerals provides the potential to diversify the group’s revenue streams and bolster sustainable growth for the long term,” says Fortress Minerals in its March 20 statement.
See also: Sembcorp issues $350 mil of guaranteed notes due 2036 at 3.65%
The proceeds will also fund Fortress Minerals’ efforts to build up its production capabilities at the Cermat Aman Sdn Bhd (CASB) mine. The mine is located at Mengapur and commenced production in July 2022. The company says it intends to build a new integrated processing plant which will enhance production capabilities at the CASB Mine and enable it to produce high grade iron ore, copper and pyrrhotite concentrate as part of the effort to grow business top lines.
“These initiatives will continue to propel the company's pipeline growth and support sustainability of earnings in the long term,” adds Fortress Minerals.
Shares in Fortress Minerals closed flat at 45 cents on March 20.
