Emerging rare earths group Hastings Technology Metals shook the punters and day traders out of its share register yesterday with news of a $110 million raising that takes the amount raised in the past couple of months to more than $250 million.
The raising will go towards developing its Yangibana rare earths project in WA which looks like being the second of its type in the state after the huge and still expanding Lynas operation at Mount Weld.
Hastings shares slumped 19% on the news of the placement’s first stage having raised $110 million from major investors at $4.40 a share (25 million shares in two separate tranches), with a further $10 million to come from shareholders in a non-underwritten share purchase plan.
The shares had previously closed at $5.42 last Friday ahead of Monday’s trading halt to allow the placement to go ahead, so the raising was done at a substantial discount of nearly 20%. That was enough to encourage the holders of more than 1.9 million shares to abandon their punt and depart the register.
The shares edged higher in later trading to close at $4.44, off 18%.
Because the total value of the placement ($110 million) is more than 15% of the company’s capital, it will have to be split in to, with the second needing shareholder approval.
The first will see the company issue 15.2 million New Shares at an offer price of $4.40 a share, to raise a total of $67 million (before costs) while subject to shareholder approval, the second tranche will see 9.8 million shares issued at $4.40 a share to raise $43 million (before costs).
Hastings’ Executive Chairman, Charles Lew, said in Wednesday’s statement “Despite soft market sentiments, the strong demand shown from both Australian and international institutional investors in this Placement is testament to the world- class nature of the Yangibana project and the significant steps already undertaken by Hastings to progress mine construction and ongoing development.”
“The Placement has also been well supported by Hastings’ existing shareholders and will further introduce a range of new investors to the register. The introduction of these high-quality institutions, together with the support shown by current long-term shareholders, has ensured that Hastings is well-capitalised to maintain development momentum at Yangibana, which remains on track for commissioning in mid-2024”.
“We are also pleased to offer our existing eligible shareholders the opportunity to participate in this equity raising via the SPP, which will open on Wednesday, 14 September 2022. We thank shareholders for their long-standing support and look forward to seeing Yangibana successfully brought into production.”
The company is also receiving $150 million in a investment from Twiggy Forrest’s private minerals company Wyloo. Hastings shareholders will vote on that deal which will give the Forrest interests a 34% stake.
The Yangibana Rare Earths project is located in the Upper Gascoyne region of Western Australia, Hastings also owns and has the Brockman project, Australia’s largest heavy rare earths deposit, near Halls Creek in the Kimberley.
