Terrain Minerals Ltd (TMX) is undertaking a capital raising initiative, targeting approximately $2.5 million (before costs) through a placement and entitlement offer. The funds are earmarked for drilling at the Smokebush Project, advancing other projects, and bolstering working capital. The entitlement offer involves a 1-for-3.7 pro-rata non-renounceable offer to existing shareholders, priced at $0.003 per share, including one free attaching new option for every share subscribed. A placement to sophisticated investors has already secured $735,000.
The offer is partially underwritten by directors Justin Virgin and Jason MacDonald, demonstrating a commitment to the company’s prospects. The capital structure will significantly change post-offer, with shares potentially increasing from 2,248,556,601 to 2,856,274,602, and options rising from 66,000,000 to 918,718,000, contingent on full subscription. The company intends to use approximately $1.7M for drilling at the Smokebush Project, and a further $250,000 to advance the Biloela Copper/Gold Project in Queensland.
The pro-forma balance sheet reflects a significant increase in cash reserves. While the board believes the company will have sufficient working capital post-raise, the prospectus emphasizes the speculative nature of the investment. Key risk factors include potential dilution for non-participating shareholders, exploration risks, and environmental and climate-related challenges. Existing shareholders’ holdings could be diluted by approximately 21.28% if they do not participate. A further dilution of 39.38% may occur if all New Options are exercised. The company plans to apply for official quotation of the new shares on the ASX.
