East Star Resources Announces Subscription and Retail Offer to Fund Drilling Expansion
Why we think this is neutral
The proposed equity raise of up to £450,000 is a relatively small amount compared to the company's market cap, and the 3.8% discount to the previous closing price is modest. However, the need for additional funding so soon after the previous announcement could indicate challenges or higher than expected costs, which is a potential concern for a micro-cap company like East Star Resources.
Key Points
- Proposed subscription of £250,000 at 1.3 pence per share
- WRAP retail offer of up to £200,000 at 1.3 pence per share
- Funds to be used to expand current drilling program in Kazakhstan
- Raise at 3.8% discount to previous closing price
Summary
East Star Resources Plc (LSE:EST) is raising up to £450,000 through a subscription of £250,000 and a WRAP retail offer of up to £200,000, both at 1.3 pence per share. The funds will be used to immediately expand the company's current drilling program at its copper and gold exploration projects in Kazakhstan. The raise is at a 3.8% discount to the previous closing price, which is a relatively modest discount but could still be seen as a potential concern for a micro-cap company like East Star Resources.