THE BOURSE WHISPERER: Stellar Resources is set to raise a combined $5.7 million, before costs, via a share placement and entitlement offer that will increase the company’s cash position to approximately $6.5 million.
Stellar has placed 39.2 million fully paid ordinary shares with institutional and sophisticated private clients of Taylor Collison at a price of eight cents per share to raise $3.1 million.
The company is also providing existing Australia and New Zealand-based shareholders the opportunity to participate in a fully underwritten one for six non‐renounceable entitlement offer, also at eight cents per share to raise an additional $2.6 million.
Stellar shareholders approved the issue of 43.5 million new shares to Gippsland Limited in January as consideration for its minority interest in the Heemskirk tin project in Tasmania.
“The acquisition removed considerable uncertainty related to the previous ownership structure and has removed a barrier to institutional investor’s interest in Stellar,” Stellar Resources said in its ASX announcement.
“Stellar is now pleased to welcome Resource Capital Funds as a cornerstone investor in Stellar through its participation in the share placement and commitment to the entitlement issue.”
Stellar said in intends using the funds raised by the placement and entitlement offer to advance the Heemskirk tin project toward the completion of a bankable feasibility study.
The company said it expects drilling to commence at the project in March that will focus on expanding the Severn deposit with a follow‐up program to the results reported in November 2011 of 6 metres grading 1.1 per cent tin.
Stellar also plans to use some funds to carry out drill testing on priority exploration targets, in particular the St Dizier tin mineralisation.