Boss goes long to avoid dilution in $1.25m raising

Published at Jun 1, 2016, in Mining

Boss Resources (ASX:BOE) has unveiled a plan to avoid short-term trading from institutional investors, ring-fencing shares to “long only” funds.

It told its investors this morning that it would raise $1.25 million via the placement of just over 31 million shares at 4c each.

Of those shares, 18.75 million will be placed to sophisticated and institutional investors which will give an undertaking not to dispose of the shares within 12 months from the issue date.

The remaining 12.5 million shares will be placed with a “long only” institutional fund.

Small cap investors are often wary of the dilutive effect placements can have on two fronts. The addition of more shares to the pool can lower the value of all the other shares, especially if the offer price is below the current trading price.

Exacerbating this though is if an institutional trader engages in short-term trades to reap the difference between a lower offer price and a higher current share price.

BOE has undertaken to keep this activity under wraps by selecting investors who are seeking to hold onto the shares for the longer term.

The funds from the placement will be used for general working capital and to fund an upcoming drill program at its Honeymoon uranium project in South Australia.

More on Boss Resources (ASX:BOE)

Location of BOE’s Honeymoon Project in South Australia

Honeymoon is being planned as an in-situ uranium mine, with acid injected underground to soak up and collect the uranium mineralisation.

The final ‘pregnant’ solution containing the uranium is then brought to the surface and processed.

The project has been in mothballs since 2013, but BOE is planning to give the project a new lease of life by conducting exploration within the next quarter – with the company eyeing a definitive feasibility study by the end of 2017.

At this stage, BOE is planning production to start in mid-2019 with a production target of 70-100 million tonnes per annum outlined.


Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


SEE THE PORTFOLIO

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X