Sign in Subscribe
Mining industry

Kagara Ltd Raises A$10 Million through Share Placement and Share Purchase Plan

Strategic Insights

— 2 min read

Perth-based Kagara Ltd (ASX:KZL) has entered into an agreement with Transamine, a concentrate trader, to sell shares representing 11.5% of its equity. The arrangement involves a placement of 25 million shares at 40 cents each, valuing the transaction at A$10 million (US$6.3 million). The funds raised will be allocated towards working capital and project development. This transaction solidifies the long-term partnership between Kagara and Transamine, with whom they have a history of concentrate trading. Additionally, Kagara has announced a share purchase plan, enabling eligible shareholders to acquire up to A$5,000 worth of shares at 40 cents each, generating A$2 million in proceeds. The primary purpose of this plan is to repay outstanding copper provisional pricing liabilities resulting from the September quarter's higher metal prices. As a result, Kagara's operations have maintained a modestly positive cash flow.

Key Takeaways:

  • Kagara Ltd (ASX:KZL) has agreed to sell shares representing 11.5% of its equity to Transamine in a placement valued at A$10 million (US$6.3 million).
  • The transaction involves the sale of 25 million Kagara shares at 40 cents each, with funds allocated towards general working capital and project development.
  • The partnership with Transamine demonstrates a long-term commitment to concentrate trading and solidifies the relationship between the two companies.
  • Kagara has launched a share purchase plan, enabling eligible shareholders to acquire up to A$5,000 worth of shares at 40 cents each, generating A$2 million in proceeds.
  • The primary purpose of the share purchase plan is to repay outstanding copper provisional pricing liabilities resulting from the September quarter's higher metal prices.
  • As a result, Kagara's operations remained modestly cash flow positive, despite the challenges arising from fluctuating metal prices.
  • The transaction complies with ASX Listing Rule 7.1, which permits the issue of up to 15% of issued capital without shareholder approval.
  • Kagara's share price declined by 2.5 cents, or 5.95%, to 39.5 cents at the time of the announcement.

Statistics:

  • A$10 million (US$6.3 million): Value of the share placement agreement between Kagara and Transamine
  • 25 million: Number of Kagara shares sold to Transamine at 40 cents each
  • 11.5%: Proportion of Kagara's equity being sold to Transamine
  • 40 cents: Price at which shares were sold to Transamine
  • A$2 million: Proceeds generated from the share purchase plan
  • A$5,000: Maximum amount that eligible shareholders can acquire under the share purchase plan
  • 5.95%: Decline in Kagara's share price at the time of the announcement

Sources:

  • Asia Pulse
  • Australian Securities Exchange (ASX)
  • Australian Associated Press (AAP)

Read more