PERTH (miningweekly.com) – ASX-listed Genesis Minerals has announced a A$20.8-million capital raise, under which gold miner Northern Star would subscribe for A$3-million in shares, and former Saracen Minerals and Northern Star MD Raleigh Finlayson would subscribe for a further A$7-million of shares.
The equity raise will consist of a share placement to raise A$16-million, with more than 266.66-million shares to be issued at a price of 6c each.
A 1-for-30 entitlement offer would also be undertaken, priced at 6c each, to raise a further A$4.8-million.
The offer price represented a 17.8% discount to Genesis’ last trading price, and a 20% discount to the company’s five-day volume weighted average share price.
Subscribers in the equity raising would receive one free attaching option for every two shares subscribed for under the equity raising, and each option would have an exercise price of 10c each, and a two-year expiry date.
Proceeds from the capital raise would be used to grow Genesis’ Ulysses gold project, in Western Australia, through aggressive exploration, the funding of ongoing feasibility studies, and to pursue other strategic opportunities.
Along with the capital raise, Genesis on Wednesday also announced a massive board restructure.
Finlayson will be appointed MD of Genesis by no later than the end of March 2022. He has the right, subject to shareholder approval, upon appointment as MD, to be issued 30-million performance rights under the Genesis incentive performance rights plan, which will have vesting hurdles tied to a 2.5-million-ounce Joint Ore Reserves Committee (Jorc) resource, a 1-million-ounce Jorc reserve and Genesis becoming a gold producer .
Former Fortescue Metals MD and CEO Neville Power and highly experienced corporate lawyer Michael Bowen will be invited to join the board as nonexecutive directors following conclusion of the placement.
Each will be issued with 15-million options at an exercise price of 10.5c with a four-year expiry. Tommy McKeith will continue as nonexecutive chairperson and Gerry Kaczmarek will continue as nonexecutive director.
Under the transition plan, Michael Fowler will remain Genesis MD until Finlayson's appointment becomes effective. At that time, Fowler will retire from the board.
Current nonexecutive director Craig Bradshaw will retire from the Genesis board at the upcoming Genesis annual general meeting (AGM).
Genesis’ largest shareholder, Alkane has advised the company that it strongly supports the strategic investment and board changes. Nonexecutive director and Alkane representative Nic Earner will retire from the board at the upcoming Genesis AGM, assuming all necessary shareholder approvals for the placement and board restructure are obtained.
Alkane has also agreed to subscribe for any shortfall under the entitlement offer subject to scale back to ensure Alkane’s voting power in Genesis does not exceed 20%.
In addition, the 2019 subscription agreement between Alkane and Genesis, under which Alkane was provided with board representation and certain other rights, will be terminated with effect from completion of the entitlement offer.