ASM sets cap for A$106m capital raise

26th March 2021 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH ( – ASX-listed Australian Strategic Materials (ASM) has unveiled plans for a A$106-million capital raise to fund key workstreams for its Korean metals plant and front-end engineering and design (FEED) studies for its Dubbo critical minerals project, in New South Wales.

The company on Friday said that it had received firm commitments for the placement of more than 13.5-million shares, priced at A$4.80 a share, to raise an initial A$65-million.

The shares will be placed under ASM’s existing placement capacity, with the offer price representing a 4% discount to the company’s last closing price, and a 10% discount to its five-day volume weighted average share price.

The shares issued under the placement will be settled on April 1.

In addition to the share placement, ASM will also undertake a 1-for-14 pro rata, non-renounceable entitlement offer, also priced at A$4.80 a share, to raise an additional A$41-million before costs.

The entitlement offer will open on April 7 and will close on April 16, unless extended.

“We are delighted to have completed the placement component of this raising from existing and new international and Australian institutional investors. I am very pleased to welcome new shareholders to the company, who join our register at a truly exciting time as we finalise plans to develop our first metallization facility on Korea,” said ASM MD David Woodall.

“The funds raised significantly bolster our balance sheet, placing the company in a strong position as we progress key workstreams which include development of the proposed Koran metals plant and advancing key FEED workstreams on the Dubbo project.

“Importantly, we continue to advance our strategy for sustainable growth, with a primary focus on developing ASM into a globally relevant, independent and integrated metals producer by 2022.”

A recently completed scoping study into an initial 5 200 t/y metals plant in Korea, has demonstrated the feasibility for the project.

The internal scoping study estimated that the project would require a capital investment of between $35-million and $45-million, and could deliver annual revenues of between $180-million to $190-million, and annual earnings before interest, taxes, depreciation and amortization of between $45-million and $50-million.

The plant could be incrementally expanded to a capacity of over 16 000 t/y by 2024.