Alara Resources capital raise plan

Alara Resources (ASX:AUQ) has released a prospectus for a capital raise through a renounceable pro rata offer. The company is set to raise approximately $15.26 million before issue costs by offering about 449 million new shares at $0.034 each. Shareholders will receive 5 new shares for every 8 existing shares, along with one free option for every two new shares. This offer, fully underwritten by Mahe Capital, aims to support various operational and financial initiatives.

Alara Resources outlook and strategy

Alara Resources' latest capital raise aims to address current operational challenges and support future growth. The company plans to use the funds to enhance production capabilities at its Wash-hi Majaza copper-gold mine in Oman by installing new tailings filter presses. Additionally, the capital will cover deferred vendor payments, loan repayments, and exploration activities. The offer is targeted at eligible shareholders in Australia and New Zealand and is fully underwritten by Mahe Capital. The offer opens on 8 November 2024 and closes on 19 November 2024, with new shares commencing trading on 27 November 2024. Alara Resources seeks to improve its financial position and operational efficiency, setting a foundation for its long-term strategic goals.

Executive insights on capital raise

The purpose of the capital raise is multifaceted. Funds will be allocated to install both interim and permanent tailings filter presses at the Wash-hi Majaza copper-gold mine in Oman to address current capacity issues. These efforts are expected to increase production rates. Additional funds will be directed towards deferred vendor payments, loan repayments, exploration activities, and general working capital.