Magnum Launches $1.94M Share and Option Offer to Fund Key Projects
Magnum Mining and Exploration Limited has launched a $1.9 million non-renounceable entitlement offer to fund its key projects, alongside significant board changes aimed at conserving cash.
- Entitlement offer to raise up to $1.94 million via shares and options
- Offer includes two shares for every five held plus one free option per share
- Funds targeted for exploration and development of Buena Vista and Palmares projects
- Managing director Neil Goodman transitions to non-executive role with remuneration restructuring
- Minimum subscription set at $500,000 with shortfall facility available
Capital Raise Details
Magnum Mining and Exploration Limited (ASX: MGU) has announced a non-renounceable entitlement offer aiming to raise approximately $1.94 million before costs. Eligible shareholders will be invited to subscribe for two fully paid ordinary shares for every five shares held as of the record date, 10 February 2025, at an issue price of $0.006 per share. Alongside each share, investors will receive one free attaching option exercisable at $0.012 within three years.
The offer includes a shortfall facility allowing shareholders who fully subscribe to their entitlement to apply for additional shares beyond their pro rata allocation. This shortfall may also be offered to third parties introduced by the company, providing flexibility to maximize capital raised.
Use of Funds and Strategic Focus
Proceeds from the entitlement offer will be directed primarily towards advancing exploration and development activities at Magnum’s Buena Vista and Palmares projects. These projects represent critical assets in the company’s portfolio, with the capital injection expected to accelerate progress and potentially unlock value. Remaining funds will support general working capital needs, underpinning ongoing operational stability.
Board Restructuring and Cost Management
In a move to conserve cash reserves, Magnum’s managing director, Neil Goodman, has transitioned to a non-executive director role effective 1 January 2025. Alongside Mr. Goodman, directors Mr. Lekkas and Mr. Martino have agreed to restructure their remuneration to a reduced monthly fee of $5,000 (excluding GST), supplemented by an issuance of shares equivalent to six months’ prior remuneration, subject to shareholder approval.
This restructuring reduces the board to three non-executive directors and reflects a broader effort to align executive incentives with shareholder interests while managing cash flow prudently during this capital raising phase.
Offer Timetable and Conditions
The entitlement offer opens shortly after the record date and is scheduled to close on 24 February 2025, with the company reserving the right to extend this deadline. A minimum subscription threshold of $500,000 applies; failure to meet this will result in either repayment of application monies or issuance of a supplementary prospectus allowing withdrawal.
Shares issued under the offer will rank equally with existing shares and are expected to be quoted on ASX shortly after issue. The company has engaged Indian Ocean Securities Pty Ltd as lead manager, who will receive options as part of their remuneration.
Investor Considerations
Shareholders are encouraged to carefully review the prospectus and consider the implications of the offer, including dilution effects and the potential upside from the attaching options. The success of the entitlement offer is pivotal for Magnum’s near-term funding and project advancement plans, while the board changes signal a disciplined approach to cost management amid market uncertainties.
Bottom Line?
Magnum’s capital raise and board reshuffle set the stage for a critical growth phase, but execution risks remain.
Questions in the middle?
- Will the entitlement offer achieve its minimum subscription threshold?
- How will the board’s remuneration restructuring impact long-term governance and strategy?
- What progress milestones can investors expect from the Buena Vista and Palmares projects post-funding?
