Helix’s $1.68M Raise Risks Dilution Amid Critical Drilling Phase

Capital Raise Details

Helix Resources Ltd (ASX – HLX) has announced a renounceable entitlement offer designed to raise up to approximately $1.68 million before costs. The offer is priced at $0.001 per new share, representing a 50% discount to the last closing price and a 44.4% discount to the 30-day volume weighted average price. This pricing strategy clearly aims to incentivize participation from existing shareholders while maintaining a fair entry point for new investors.

For every two new shares subscribed, shareholders will receive one free-attaching option exercisable at $0.002, valid for two years. The company intends to list these options on the ASX, subject to meeting listing requirements. This sweetener adds potential upside for investors willing to participate in the capital raising.

Strategic Use of Funds

The proceeds from the entitlement offer will primarily fund drilling activities at Helix’s White Hills copper-gold project and support mineral resource estimation programs at the Gold Basin project. These initiatives are critical steps in advancing the company’s exploration pipeline and potentially unlocking value for shareholders. Additional funds will cover general working capital and the costs associated with the offer itself.

Underwriting and Shareholder Participation

The offer is partially underwritten up to $500,000 by Mahe Capital, the lead manager and underwriter, with sub-underwriting commitments totaling $80,000 from directors Kylie Prendergast and Kevin Lynn. This underwriting arrangement provides a degree of certainty around the minimum funds to be raised, mitigating some execution risk.

Notably, directors Kylie Prendergast and Executive Chair Michael Povey have signaled their intention to participate, with Prendergast taking up her full entitlement and Povey committing to 50% of his entitlement subject to voting power considerations. This insider participation often signals confidence in the company’s prospects.

Entitlement Trading and Timetable

As a renounceable offer, shareholders can trade their entitlement rights on the ASX from August 14 to August 27, 2025. This flexibility allows shareholders who do not wish to participate to monetize their rights, while those interested can apply for additional shares and options through a shortfall offer, subject to board discretion.

The offer opens on August 20 and is expected to close on September 3, 2025, with new securities anticipated to commence trading shortly thereafter. This timetable provides a clear framework for investors to make informed decisions.

Balancing Dilution and Growth

While the discounted offer price and issuance of new shares will dilute existing holdings, the capital raised is earmarked for advancing key exploration projects that could materially enhance Helix’s asset base. The market will be watching closely to see how the drilling results and resource updates unfold in the coming months, which will be critical in justifying the dilution and driving share price momentum.