Almonty’s AUD 18.45 Million Placement Hinges on Regulatory Approval Amid Balance Sheet Restructuring
Almonty Industries has locked in final commitments for an AUD 18.45 million equity placement from existing shareholders, aiming to strengthen its financial position and cover offer costs. The placement includes warrants and options, with closing pending regulatory approval.
- Final commitments received for AUD 18.45 million equity placement
- Placement involves issuance of Canadian units and CDI units at C$0.82 and A$0.90 respectively
- Warrants and unlisted options issued with three-year expiry
- Proceeds targeted at balance sheet restructuring and offer costs
- Closing subject to TSX and ASX regulatory approvals
Equity Placement Secured from Long-Standing Shareholders
Almonty Industries Inc. (ASX: AII, TSX: AII) announced it has received the final commitments for an equity placement totaling the equivalent of AUD 18.45 million. This funding round, completed in December 2024, was supported by long-standing shareholders and involves the issuance of 4.53 million Canadian units and 15.41 million Chess Depository Units (CDIs) at prices of C$0.82 and A$0.90 respectively.
The placement is structured to include one warrant for every common share issued and one free unlisted option for every CDI issued. These instruments carry exercise prices of C$1.14 and A$1.25 respectively, with a three-year expiry period, providing investors with potential upside participation beyond the initial equity injection.
Strategic Use of Proceeds and Financial Positioning
The net proceeds from this placement are earmarked primarily for restructuring Almonty’s balance sheet and covering associated offer costs. This move signals the company’s intent to strengthen its financial footing amid ongoing operational and market challenges. The restructuring effort may provide Almonty with greater flexibility to navigate commodity price volatility and fund its development projects.
RM Corporate Finance Pty Ltd acted as the lead manager for the placement, earning a 6% fee on the funds they raised. The placement units are expected to settle on or before 4 February 2025, pending all necessary regulatory approvals from the Toronto Stock Exchange (TSX) and the Australian Securities Exchange (ASX).
Almonty’s Global Tungsten Operations
Almonty operates several tungsten mining assets, including the Los Santos Mine in Spain, the Panasqueira Mine in Portugal, and the Sangdong Mine in South Korea, alongside the Valtreixal tin-tungsten project in Spain. The company’s diversified geographic footprint and focus on tungsten, a critical industrial metal, position it strategically within the global supply chain, especially given the concentration of tungsten production in China.
The equity raise will likely support ongoing development and operational stability across these assets, particularly the Sangdong project, which is one of the world’s largest high-grade tungsten deposits outside China. Maintaining financial health is crucial for Almonty as it advances these projects amid fluctuating commodity prices and geopolitical uncertainties.
Regulatory and Market Considerations
While the placement has secured strong shareholder support, its completion remains contingent on regulatory approvals from the TSX and ASX. This introduces an element of uncertainty, although such approvals are generally procedural. Investors will be watching closely for the final settlement and the subsequent impact on Almonty’s share structure and liquidity.
Additionally, the issuance of warrants and options provides existing investors with leverage to benefit from potential future share price appreciation, aligning interests between the company and its shareholder base. However, dilution risk remains a consideration for current shareholders.
Bottom Line?
Almonty’s successful equity placement marks a pivotal step in shoring up its balance sheet, but regulatory clearance and market conditions will shape the next phase.
Questions in the middle?
- Will regulatory approvals from TSX and ASX proceed smoothly and on schedule?
- How will the new capital impact Almonty’s project development timelines and operational cash flow?
- What are the potential dilution effects on existing shareholders once warrants and options are exercised?
