Lodestar Offers 19.9 Million Loyalty Options Exercisable at $0.01 Until 2029

Lodestar’s Loyalty Options Offer

Lodestar Minerals Limited (ASX, LSR) has announced a strategic bonus issue of Loyalty Options to its existing shareholders. The offer grants one Loyalty Option for every twenty shares held as of the record date, with no cost to shareholders at issuance. These options carry an exercise price of just $0.01 and expire on 31 August 2029, providing a long-term opportunity for shareholders to increase their stake in the company.

This move is designed primarily to reward shareholders for their ongoing support and to incentivize long-term holding. While no immediate capital will be raised through the issuance of these options, the company stands to receive approximately $199,361 if all options are exercised, which would bolster its working capital and exploration activities.

Capital Structure and Shareholder Impact

The offer will not dilute existing shareholders’ interests at the point of issue since no new shares are issued immediately. However, if and when the Loyalty Options are exercised, new shares will be issued, potentially diluting holdings by up to 4.76%. The company notes that the exercise of these options is uncertain and will depend on future market conditions and company performance.

Importantly, the offer is non-renounceable, meaning shareholders cannot trade or transfer their entitlement to others. The Loyalty Options will be listed on the ASX, allowing for secondary market trading, which adds liquidity to these instruments.

Strategic Purpose and Financial Outlook

Lodestar’s management emphasizes that the offer aims to provide shareholders with potential upside exposure to the company’s future success, particularly as it advances its exploration projects across Australia and Chile. The funds potentially raised from option exercises would be deployed consistent with the company’s existing operations, primarily supporting exploration and working capital needs.

The company’s recent financial reports highlight some uncertainty regarding its going concern status, making this offer a timely mechanism to potentially strengthen its financial position without immediate capital outlay from shareholders.

Risks and Considerations

Investors should be aware that the Loyalty Options are highly speculative. Risks include dilution upon exercise, the company’s need for additional capital, exploration uncertainties, and broader market volatility. The company’s projects, including Earaheedy, Coolgardie West, and Ned’s Creek, remain in exploration phases, with no guarantee of commercial success.

Moreover, the offer is restricted to shareholders in Australia, New Zealand, and the United Kingdom, reflecting regulatory compliance and practical considerations. Shareholders outside these jurisdictions are excluded from participation.

Looking Ahead

Lodestar’s Loyalty Options offer represents a strategic effort to reward loyal shareholders while preserving flexibility for future capital raising. Market participants will be watching closely to see how the options trade on ASX and whether shareholders choose to exercise them, which could signal confidence in the company’s exploration prospects and financial health.