Junior Australian potash producer Reward Minerals Ltd. has announced a 2-to-1 renounceable entitlement offer seeking to raise A$22.785 million (approximately $15.3 million at current exchange rates) before costs to fund the acquisition of the Beyondie Sulfate of Potash (SOP) project in Western Australia.
The announcement on Jan. 10 followed the previous day’s approval by Reward’s shareholders of the acquisition from Beyondie’s administrators. The potash junior signed a binding share sale agreement with McGrathNicol, the receivers and managers of Beyondie’s former developer, Kalium Lakes Ltd., in early December for a total consideration of A$20 million (GM Dec. 8, 2023).
Perth-based Reward said it hopes to raise the A$22.785 million via a pro-rata renounceable entitlement offer of shares to eligible shareholders on the basis of two new shares for every one share held on Jan 15, 2024, at an issue price of A$0.05 per new share, together with one free-attaching quoted option (exercisable at A$0.10 and expiring three years from the issue date) for every two new shares successfully subscribed for the entitlement offer.
The offer closes at 5:00 pm (AWST) on Jan. 25 and is renounceable, which means there will be trading of rights on the ASX and shareholders may dispose of their entitlement to subscribe for new shares and new options under the entitlement offer to another party other than on the ASX.
“The capital raising will allow completion of the Beyondie transaction and for Reward to proceed to commencement of R&D activities at the site as soon as practical with a view to development of a robust operational strategy in the near term,” said Reward CEO Lorry Hughes in the company’s Jan. 10 ASX release.
The entitlement offer is partially underwritten for A$16 million by RM Corporate Finance Pty Ltd. and remains conditional on Reward raising the full subscription amount of A$22,785,314.
SOP junior Kalium Lakes went into receivership last August after it failed to find further financial support for the continued development of the Beyondie SOP project, located some 160 kilometers southeast of Newman in Western Australia (GM Aug. 18, 2023).
Kalium was Australia’s first SOP producer, producing its first batch at Beyondie in October 2021 (GM Oct. 8, 2021). Despite 2022’s high SOP prices, however, the company remained cash-flow negative.
Reward has two other potash projects in Western Australia, including its flagship Kumpupintil Lake Potash development (formerly known as Lake Disappointment Potash Project) east of Newman, and the Carnarvon Potash Project north of Carnarvon, some 900 kilometers north of Perth.