Impact Minerals Launches Renounceable Rights Issue to Fund HPA Growth Strategy

Impact Minerals (ASX: IPT) is seeking to raise up to $4.1 million before costs through a one-for-four renounceable rights issue to support its High Purity Alumina (HPA) development strategy and exploration portfolio.

Eligible shareholders will be able to subscribe for new shares at $0.032 each, a 22% discount to the last closing price of $0.041 and a 26% discount to the 90-day volume weighted average price of $0.043.

For every three new shares subscribed for, shareholders will receive two free attaching options exercisable at $0.06 for 2.5 years, with Impact planning to apply for quotation of both the new shares and options.

The raising will direct funds towards the Lake Hope HPA project, further investment in Alluminous, exploration at the Broken Hill and Lake Irwin projects, working capital, and transaction costs.

Funding for Dual HPA Pathways

Impact holds the Lake Hope resource as its mineral-based pathway toward HPA production and also owns 50% of Alluminous, which is developing a chemical pathway aimed at producing a separate HPA product.

The structure gives Impact exposure to two distinct development routes that it considers capable of addressing different end-user requirements, while potential byproduct revenue could assist funding during longer-term customer testing.

“HPA is a critical mineral that is in high demand globally and we are well positioned with our Lake Hope resource providing a mineral pathway to become a producer,” chair Jim McKerlie said.

“[With] our 50% holding in Alluminous, […] we have the potential to produce at least two distinct HPA products that will meet different needs in the end user market.”

“Furthermore, potential revenue from by-products could assist funding during the longer-term customer testing of HPA."

Rights Offer Flexibility

The rights issue is open to eligible shareholders in Australia, New Zealand, and Germany who hold Impact shares on the 20 August record date, with rights trading scheduled to begin on 19 August.

Because the offer is renounceable, eligible shareholders can trade their rights and may apply for additional shares and options beyond their entitlement through any available shortfall.

New investors can participate by purchasing Impact shares on market by the close of trading on 20 August, provided they meet the offer's eligible shareholder requirements.

The rights issue is partially underwritten to $1.5m by lead manager and underwriter Mahe Capital.

New shares issued under the offer will rank equally with existing shares, with the offer scheduled to open on 25 August and close on 9 September unless extended.

Capital Raising Timeline

Rights trading is scheduled to end on 2 September, followed by deferred settlement trading in the new shares from 3 September.

Impact expects to announce the results of the entitlement offer and issue the new shares and options on 16 September, with normal trading in the new shares scheduled to begin on 17 September.

A prospectus was lodged on 17 August and will be sent with personalised entitlement and acceptance forms to eligible shareholders shortly after the record date.

The timetable remains indicative and may change subject to the Corporations Act and listing rules.