Highlights
- New Offer: Fully underwritten Entitlement issue on the basis of 1 New Share for every 3 Shares held at Issue Price of $0.003 per Share with 1 free attaching option for every 1 share subscribed, exercisable at $0.006 within 3 years from the date of issue.
- Major shareholders, the Copulos Group and the Retzos Group have each committed to apply for full entitlement (approximately 39% of the Company being A$0.68 million) in the Offer, a strong show of support from two of the Company’s largest shareholders.
- Funds raised from the Offer will be used for exploration of gold prospects at the Plomosas project, to repay unsecured loans, for working capital and to meet Offer expenses.
Consolidated Zinc Limited (“Company“) (ASX:CZL) advises shareholders that it intends to undertake a new fully underwritten Entitlement Issue on the basis of one (1) New Share for every three (3) shares held by eligible shareholders on the record date at a new issue price (New Issue Price) of $0.003 per New Share to raise up to approximately $1.7 million (New Offer). The Lead Manager and Underwriter to the New Offer is Pinnacle Corporate Finance Pty Ltd (“Pinnacle“).
Subscribers in the New Offer will receive one (1) free-attaching option (New Option) for every one
(1) New Share subscribed for and issued, exercisable at $0.006 per Option on or before the date which is three years from the date of issue. Subject to meeting the requirements of the ASX Listing Rules, the Company intends to apply for quotation of the New Options.
Funds raised from the Offer will be used for exploration of gold prospects at the Plomosas project, to repay unsecured loans, for working capital and to meet Offer expenses. Announcements with further details and updates on the Company’s operations, Resource drilling and gold exploration activities are being released today, concurrently with this announcement.
Brad Marwood, Managing Director said “Whilst disappointed that market volatility globally necessitated the delay and change of terms from the Rights Issue announced in March, we remain excited about the high grade nature of the Plomosas project and especially the potentially high grade gold exploration aspect of the Plomosas Project.
The Board believes the New Offer represents a good opportunity for shareholders to maintain their shareholding at a compelling price. We thank our major shareholders for their continued support of the Company and are pleased to be able to offer existing eligible shareholders the ability to participate at the New Offer price and to be entitled to the New Options.
Capital Raising
The New Offer will result in 575,311,104 New Shares and 575,311,104 New Options being issued.
The Company expects to lodge a prospectus for the purpose of the New Offer (“Prospectus”) with ASIC on or about 24 April 2020.
Two of the Company’s largest shareholder groups, the Copulos Group with a current voting power of 31.91% and the Retzos Group with a current voting power of 7.42%, have re-committed to apply for their full entitlement under the New Offer. The directors consider this a strong show of support from two of the Company’s largest shareholders and thank them for their continued commitment.
The Company intends to use the funds raised from the New Offer as follows:
| Item | Amount1 |
| Expenses of the Offer | $200,000 |
| Exploration of gold prospects at the Company’s Plomosas Project2 | $600,000 |
| Repayment of the Working Capital Facility3 | $400,000 |
| Working capital4 | $525,933 |
| Total | $1,725,933 |
Notes:
- The above table is a statement of the Board’s current intention as at the date of this announcement and the Board reserves the right to alter the way the funds are applied.
- Exploration of high-grade gold system identified at Plomosas (refer announcements dated 30 January 2020 and 23 April 2020)
- This sum represents the repayment in full of unsecured loans of $400,000 from Stephen Copulos and Chris Retzos or entities associated with them. The Company proposes to offset this amount against the same amount payable by the Copulos Group and the Retzos Group under their entitlements under the Offer. In these circumstances, no interest will be payable by the Company to those lenders.
- Working capital may include wages, payments to contractors, rent and outgoings, insurance, accounting, audit, legal and listing fees, payments to creditors, interest payments, other items of a general administrative nature and cash reserves but excludes sales which may be used in connection with the Company’s activities, as determined by the Board at the relevant time.
The timetable for the New Offer is as follows:
| Announcement of Entitlement Offer | 23 April 2020 |
| Appendix 3B lodged with ASX | 23 April 2020 |
| Lodgement of Prospectus with ASIC | 24 April 2020 |
| Ex date | 29 April 2020 |
| Record Date for determining Entitlements | 30 April 2020 |
| Prospectus sent to Eligible Shareholders Opening Date of the Offer | 5 May 2020 |
| Last day to extend the Closing Date | 21 May 2020 |
| Closing Date of the Offer | 26 May 2020 |
| Securities quoted on a deferred settlement basis | 27 May 2020 |
| Announcement of results of issue | 28 May 2020 |
| Issue date of Securities under the Offer (before 12:00pm (AEST)) Dispatch of holding statements | 1 June 2020 |
| Appendix 2A to be lodged with ASX applying for quotation of actual number of Securities issued | 1 June 2020 |
| Quotation of Securities issued under the Offer | 2 June 2020 |
Subject to the Listing Rules, the above dates may be changed without notice.
The New Offer will be made to the Company’s shareholders with a registered address in Australia or New Zealand on the Record Date (“Eligible Shareholders“).
Assuming that no Options or convertible securities are exercised or converted before the Record Date, the effect of the New Offer on the Company’s issued share capital is shown in the following table:
| Shares | Full Subscription |
| Existing Shares | 1,725,933,313 |
| New Shares issued under the Offer | 575,311,104 |
| Total Shares on issue after completion of the Offer | 2,301,244,417 |
| Options | Full Subscription |
| Existing Options | 123,283,882 |
| New Options issued under the Offer | 575,311,104 |
| New Options issued to Pinnacle | 15,000,000 |
| Total Options on issue after completion of the Offer | 713,594,986 |
Shareholders may view all the Company’s ASX announcements, including those relating to the New Offer, on the ASX’s website at www.asx.com.au or alternatively on the Company’s website at www.consolidatedzinc.com.au.
It is anticipated that the Prospectus offering the New Shares and New Options for subscription will be mailed to Eligible Shareholders on or about 6 May 2020.
Application will be made to ASX for official quotation of the New Shares and New Options. No shareholder approval is required to the New Offer.
Overseas Shareholders
The New Offer is only made to Eligible Shareholders (shareholders with a registered address in Australia or New Zealand at the Record Date). Therefore, if you are a shareholder with a registered address other than Australia or New Zealand, no offer will be made to you. In making this decision, the directors have taken into account the small number of overseas shareholders and the costs and administrative complexity of complying with applicable regulations in jurisdictions outside Australia and New Zealand.
Capital Raising Fees
In consideration for acting as Lead Manager and underwriting the New Offer, Pinnacle will be paid a management fee of 2% and underwriting fee of 4% on the aggregate amount underwritten and will be issued 15,000,000 New Options.
This announcement was authorised for issue to the ASX by the Directors of the Company. For further information please contact:
Brad Marwood
Managing Director
08 9322 3406
Original Article: https://www.consolidatedzinc.com.au/wp-content/uploads/2020/04/20200423-Capital-Raising-Update-ASX-LODGEMENT-FINAL.pdf
