Cannindah Launches $4.5M Entitlement Offer at $0.015 to Fund Drilling Expansion

Capital Raise to Accelerate Exploration

Cannindah Resources Limited (ASX, CAE) has announced a fully underwritten entitlement offer to raise approximately $4.5 million at an offer price of $0.015 per share. The capital raise is designed to accelerate drilling activities at the Mt Cannindah copper-gold project in Queensland, where the company holds a 14.5 million tonne resource grading 1.09% copper equivalent.

The entitlement offer is non-renounceable and pro-rata, allowing existing eligible shareholders to subscribe for one new share for every 2.4 shares held. Alongside the new shares, investors will receive free attaching options exercisable at $0.04 within three years, providing potential upside participation in the company’s future growth.

Strong Support from Major Shareholders and Directors

Major shareholder Aquis has committed to fully subscribe for its pro-rata entitlement, representing a $1.55 million investment. Additionally, the board of directors, including Tony Rovira, John Morrison, and Michael Hansel, have collectively sub-underwritten $475,000 of the offer, signaling strong internal confidence in the project’s potential.

Canaccord Genuity has been appointed as lead manager and underwriter, ensuring the offer is fully supported. The involvement of long-term shareholders in sub-underwriting arrangements further reinforces market confidence in Cannindah’s exploration strategy and the potential for a Tier-1 discovery.

Focused Use of Proceeds on Resource Expansion and New Targets

Funds raised will be directed primarily towards immediate Reverse Circulation drilling aimed at expanding the existing Mineral Resource Estimate (MRE) at Mt Cannindah, which currently stands at 14.5Mt at 1.09% CuEq. The deposit remains open along strike to the north and south, as well as at depth, offering promising targets for resource growth.

In parallel, the company plans to drill two underexplored porphyry copper-gold targets located approximately 1 to 1.5 kilometers southeast and east of the main breccia deposit. These Southern and Eastern Targets exhibit significant geochemical and geophysical anomalies consistent with Tier-1 porphyry systems, yet have not been subjected to modern exploration drilling.

Strategic Outlook and Market Positioning

Director Tony Rovira highlighted the enhanced geological understanding achieved through recent reinterpretation efforts, which have sharpened drill targeting and underscored the potential for a transformational discovery. The company expects drilling to commence within 4 to 6 weeks, with results anticipated to provide critical insights into the resource’s scale and grade.

The offer price represents a 21.1% discount to the last traded price and a 28.2% discount to the 15-day volume-weighted average price, reflecting a strategic approach to incentivize participation while balancing dilution concerns. The issuance of attaching options also offers shareholders additional leverage on future share price appreciation.

Overall, this capital raise positions Cannindah Resources to aggressively advance its flagship Mt Cannindah project, with the dual focus on expanding a known resource and unlocking new high-potential porphyry targets that could significantly enhance the company’s valuation and market profile.