HRE - Heavy Rare Earths

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HEAVY RARE EARTHS LIMITED​

Non-Renounceable Entitlement Offer Booklet Share​

Announcement Type: Entitlement Offer​

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29 November 2024 9:08 AM. Open PDF | 30 Pages

Heavy Rare Earths Limited announces a fully underwritten non-renounceable entitlement offer to raise approximately $1.26 million before costs, primarily to fund a uranium acquisition.

Summary​

• Heavy Rare Earths Limited (HRE) is offering Eligible Shareholders 42,137,575 new shares at $0.03 each.
• This 1-for-2 entitlement offer aims to raise approximately $1.26 million before costs.
• The offer is fully underwritten by Cygnet Capital Pty Ltd and Taylor Collison Limited.
• The funds will mainly support the acquisition of an 80% interest in uranium projects from Havilah Resources Limited.
• The offer closes on December 16, 2024.
• Shareholders in Australia, New Zealand, and Singapore are eligible to participate.

Sentiment​

Score: 6
Explanation: The announcement presents a positive step for the company, securing funding for a strategic acquisition. However, the inherent risks in the mining sector and the potential for future capital raises temper the overall positive sentiment.

Highlights​

• A fully underwritten non-renounceable entitlement offer of 42,137,575 new shares.
• Offer price of $0.03 per share.
• Target to raise approximately $1.26 million before costs.
• Joint underwriters: Cygnet Capital Pty Ltd and Taylor Collison Limited.
• Primary use of funds: Acquisition of an 80% interest in uranium projects.
• Closing date: December 16, 2024.

Positives​

• Fully underwritten offer ensures capital raising success.
• Significant funds raised for strategic acquisition.
• Acquisition expands into the uranium sector.

Negatives​

• High-risk investment in the mineral exploration and development sector.
• Potential dilution of existing shareholder holdings.
• Risks associated with the uranium acquisition, including due diligence and regulatory approvals.
• Limited geographic participation in the entitlement offer.

Risks​

• Risks associated with mineral exploration and development, including geological uncertainties, regulatory hurdles, and commodity price volatility.
• Potential delays or failure to complete the uranium acquisition.
• Dilution of existing shareholder holdings due to the share issue.
• Dependence on key management personnel.
• Environmental risks associated with mining operations.
• Need for future capital raises.
• Uncertainty regarding future regulatory frameworks, including climate change regulations.

Future Outlook​

The company anticipates issuing the new shares and completing the proposed acquisition on or about December 20, 2024. The success of the acquisition and the company's future performance are subject to various risks and uncertainties.

Management Comments​

• On behalf of the Board...I am pleased to invite you to participate in the Company’s 1 (one) for 2 (two) non-renounceable entitlement offer…'
• The proceeds of the Entitlement Offer will be used, in part, to fund the proposed acquisition…'
• The Company anticipates issuing the New Shares under the Entitlement Offer and completing the Proposed Acquisition on or about Friday, 20 December 2024.'

Industry Context​

This capital raising and acquisition reflects a broader trend in the rare earths and uranium sectors, where companies are seeking to expand their operations and secure new resources. The acquisition of uranium assets diversifies HRE's portfolio and positions it for growth in a sector experiencing increasing demand.

Next Steps​

• Issue of new shares under the Entitlement Offer.
• Completion of the proposed acquisition of uranium projects.
• Commencement of trading of new shares on a normal basis.
• Potential future capital raises for further development activities.

Key Dates​

• October 21, 2024: Company announced the Entitlement Offer as part of a broader capital raising and acquisition strategy.
• October 25, 2024: ASX announcement supplementing the October 21, 2024 announcement.
• October 29, 2024: Offer Document and section 708AA(2)(f) Cleansing Notice to ASX released.
• November 28, 2024: Annual General Meeting (AGM) held to ratify the placement and acquisition.
• December 3, 2024: Ex-date for the Entitlement Offer.
• December 4, 2024: Record date to determine entitlement to new shares.
• December 5, 2024: Dispatch of Offer Document and Application Form; Entitlement Offer opens.
• December 16, 2024: Entitlement Offer closes at 7.00 pm (AEDT).
• December 17, 2024: New shares quoted on a deferred settlement basis.
• December 20, 2024: Anticipated issue of new shares and completion of the acquisition.
• December 23, 2024: Trading of new shares commences on a normal basis.

Keywords​