Chilwa Minerals Limited prices US$3.5M offering ahead of Nasdaq debut
The Australian explorer is selling 625,000 depositary shares with matching warrants and expects the financing to close Oct. 2.
Mara Quinlan
Chilwa Minerals Limited ASXCHW NASDAQCHWM said Wednesday it priced a US$3.5 million underwritten offering of American depositary shares ahead of a planned Nasdaq debut Thursday. The base sale would represent 6.25 million new ordinary shares if it closes, with warrants that could add another 6.25 million if exercised.
Shares in Chilwa ASXCHW rose 1.67 per cent to A$0.92 as of 11:01 a.m. AEST Thursday on the Australian Securities Exchange. The company expects its U.S. depositary shares to begin trading under CHWM on Oct. 1.
The Sept. 30 offering terms call for 625,000 American depositary shares paired with warrants for 625,000 more, at US$5.60 for each depositary share and accompanying warrant. Each depositary share represents 10 ordinary shares. The warrants can be exercised immediately at US$5.60 per depositary share and expire five years from their original issue date.
Chilwa expects gross proceeds of US$3.5 million before underwriting discounts and other expenses. The transaction is expected to close on or about Oct. 2 in New York, subject to customary closing conditions, with Maxim Group LLC as sole bookrunner.
The offer price works out to US$0.56 for each ordinary share represented by a depositary share, with a warrant included in the package. Chilwa did not state a discount to its ASX share price in the Sept. 30 announcement, and the shares trade in a different currency from the U.S. offering.
Chilwa granted Maxim a 45-day option to buy up to 92,000 additional depositary shares and/or up to 92,000 warrants. Those additional depositary shares would represent up to 920,000 ordinary shares, with the same number of ordinary shares underlying the optional warrants if exercised.
The Australian company explores at the Chilwa Critical Minerals Project in Malawi, where it holds tenements through Chilwa Minerals Africa Limited. Its Sept. 30 release assigns no fixed portion of the proposed proceeds to a particular drilling campaign and provides no estimate of how long the proceeds would cover spending.
"The Company intends to use the net proceeds from this offering to further its mineral exploration activities, for working capital and other general corporate purposes," Chilwa said in the release.
The company's Sept. 30 SEC filing registers depositary shares representing 10 ordinary shares each for Nasdaq. It says the underlying ordinary shares are registered in connection with the depositary share listing, rather than for separate trading on Nasdaq. Chilwa's ordinary shares continue to trade on the ASX.
Under the Sept. 30 terms, exercise of all the base warrants would bring Chilwa another US$3.5 million at the US$5.60 strike. That cash depends on investors exercising the warrants and is separate from the announced gross offering amount.
Chilwa expects the offering to close on or about Oct. 2, New York time.
