Hot Chili to Undertake a Capital Raising by Private Placement
Hot Chili to Undertake a Capital Raising by
Private Placement
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR FOR
DISSEMINATION IN
THE UNITED STATES
/
PERTH, Australia
,
May 1, 2024
/CNW/ - Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX:
HHLKF) ("Hot Chili" or the "Company") is pleased to announce it has engaged joint lead managers to
undertake a capital raising by way of a placement of shares to institutional, professional, and other
investors to raise up to
A$29.9 million
.
Proposed Placement
The Company has appointed Veritas Securities Limited and Cormark Securities Inc. as joint lead
managers ("JLMs") and BMO Capital Markets, as co-manager (together with the JLMs, the
"Agents"), to raise up to
A$29.9 million
("Capital Raising") on a "best endeavours basis" by way of a
private placement ("Placement") of up to 29,860,000 new fully paid ordinary shares ("Shares")
offered to institutional, professional, and other investors.
The issue of the Shares under the Placement will not be subject to shareholder approval and will be
made within the Company's 25% placement capacities under Australian Securities Exchange ("ASX")
listing rules 7.1 and 7.1A.
The Shares will be issued at a price of
A$1.00
per Share
(C$0.89)
per Share and will rank equally
with all other Shares currently on issue.
The issue price of
A$1.00
per Share represents an approximate 20% discount to the Company's last
closing price and an approximate 18.6% discount to the 10-day volume weighted average price of
Hot Chili shares traded on ASX prior to the Company entering into a trading halt on
1 May 2024
.
The issue of the Shares under the Placement is expected to occur on
9 May 2024
, or on such other
date as the Company and the JLMs may agree.
The Placement is being made in
Australia
under an offer to investors who qualify as professional or
sophisticated investors under sections 708(8), (10) and (11) of the
Corporations Act 2001
(C'h). The
Placement is being made in
Canada
by way of private placement in reliance on the "listed issuer
financing exemption" from the prospectus requirements (the "LIFE Exemption") available under Part
5A of National Instrument 45-106 –
Prospectus Exemptions
("NI 45-106") in each of the provinces
and territories of
Canada
, other than
Quebec
, for aggregate gross proceeds of up to
C$10,000,000
(A$11,235,955)
or up to approximately 11,235,955 Shares (the "Canadian Offering"). The Shares
issued pursuant to the LIFE Exemption under the Canadian Offering will not be subject to a hold
period pursuant to applicable Canadian securities laws. There is an offering document related to the
Canadian Offering that can be accessed on SEDAR+ (
www.sedarplus.ca
) under the Company's
profile and on the Company's website at
www.hotchili.net.au
. Prospective investors in the Canadian
Offering should read the offering document before making an investment decision.
The Shares under the Placement may also be offered in
the United States
pursuant to available
exemptions from the registration requirements of the United States Securities Act of 1933, as
amended, ("1933 Act"), and applicable state securities laws, and in those other jurisdictions outside
of
Australia
,
Canada
and
the United States
provided it is understood that no prospectus filing or
comparable obligation, ongoing reporting requirement or requisite regulatory or governmental
approval arises in such other jurisdictions.
The Placement remains subject to the receipt of all necessary approvals, including the approval of
the TSX Venture Exchange ("TSXV").
Purpose of Capital Raising and Use of Funds
The Company has been receiving increasing interest from potential strategic funding parties in its
advanced Costa Fuego copper-gold development and its recently announced Water Supply Studies.
This interest, in combination with a rising copper price environment, provides confidence to
accelerate the Company's growth and development plans while preserving control of these assets.
Proceeds from the Placement will provide up to 18 months funding to be used for the completion of
the Costa Fuego Pre-Feasibility Study, completion of the Water Supply Business Case Study,
completion of the Costa Fuego Environmental Impact Assessment, ongoing exploration, drilling and
consolidation activities, and for general working capital purposes.
The Placement aims to increase Hot Chili's trading liquidity on the TSXV and maintain the Company's
strategic funding optionality, while ensuring Costa Fuego remains one of a limited number of globally
significant copper developments, not owned by a major mining company, that could deliver
meaningful new copper supply this decade.
At the closing of the Placement, the Company will pay to the Agents a cash commission equal to
6.0% of the gross proceeds of the Placement and, subject to the approval of Hot Chili shareholders
in accordance with ASX Listing Rule 7.1, will issue to the Agents such number of non
transferable
and unlisted options in the Company (the "Broker Options") as is equal to 6.0% of the number of
Shares issued under the Placement. Each Broker Option will be exercisable to acquire one Share at
a price of
A$1.50
per Share on or before the date that is 24 months following the issue of the Broker
Options.
Further announcement of Placement details
The Company's securities are presently in a trading halt and the Company will request continuation
of the trading halt and voluntary suspension of trading in its securities on ASX and TSXV until an
announcement regarding the result of the Placement. The Placement announcement is anticipated to
be made prior to commencement of trading on ASX on Monday, 6 May
2024 (AEST)
.
This announcement is authorised by the Board of Directors for release to ASX and TSXV.
Hot Chili's Managing Director and Chief Executive Officer Mr
Christian Easterday
is
responsible for this announcement and has provided sign-off for release to the ASX and
TSXV.
For more information please contact:
Christian Easterday
Managing Director – Hot Chili
Tel: +61 8 9315 9009
Email:
Penelope Beattie
Company Secretary – Hot Chili
Tel: +61 8 9315 9009
Email:
Harbor Access
Investor & Public Relations (Canada)
Email:
Email:
or visit Hot Chili's website at
www.hotchili.net.au
US Securities Laws
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall
there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful, including any of the securities in
the United States
. The securities have not been
and will not be registered under the 1933 Act or any state securities laws, and may not be offered
or sold within
the United States
unless registered under the 1933 Act and applicable state securities
laws, or an exemption from such registration requirements is available.
Forward Looking Statements
This news release contains certain statements that are "forward-looking information" within the
meaning of Canadian securities legislation and Australian securities legislation (each, a "forward-
looking statement"). Forward-looking statements reflect the Company's current expectations,
forecasts, and projections with respect to future events, many of which are beyond the Company's
control, and are based on certain assumptions. No assurance can be given that these expectations,
forecasts, or projections will prove to be correct, and such forward-looking statements included in
this news release should not be unduly relied upon. Forward-looking information is by its nature
prospective and requires the Company to make certain assumptions and is subject to inherent risks
and uncertainties. All statements other than statements of historical fact are forward-looking
statements. The use of any of the words "believe", "could", "estimate", "expect", "may", "plan",
"planned", "planning", "potential", "project", "projections", "should", "up-scale", "will", "would" and
similar expressions are intended to identify forward-looking statements.
The forward-looking statements within this news release are based on information currently available
and what management believes are reasonable assumptions. Forward-looking statements speak
only as of the date of this news release. In addition, this news release may contain forward-looking
statements attributed to third-party industry sources, the accuracy of which has not been verified by
the Company.
In this news release, forward-looking statements relate, among other things, to: the terms of the
Placement, the use of proceeds from the Placement, the timing and ability of the Company to close
the Placement, the Company's ability to obtain all regulatory, including the approval of the TSXV,
and shareholder approvals, certain fees and commissions payable under the Placement, and timing
and ability to complete the Company's stated business objectives.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors,
which may cause the actual results, performance, or achievements of the Company to be materially
different from any future results, performance or achievements expressed or implied by the forward-
looking statements. A number of factors could cause actual results to differ materially from a
conclusion, forecast or projection contained in the forward-looking statements in this news release,
including, but not limited to, the following material factors: obtaining all regulatory and shareholder
approvals for the Placement; operational risks; risks related to the cost estimates of exploration;
sovereign risks associated with the Company's operations in
Chile
; changes in estimates of mineral
resources of properties where the Company holds interests; recruiting qualified personnel and
retaining key personnel; future financial needs and availability of adequate financing; fluctuations in
mineral prices; market volatility; exchange rate fluctuations; ability to exploit successful discoveries;
the production at or performance of properties where the Company holds interests; ability to retain
title to mining concessions; environmental risks; financial failure or default of joint venture partners,
contractors or service providers; competition risks; economic and market conditions; and other risks
and uncertainties described elsewhere in this news release and elsewhere in the Company's public
disclosure record.
Although the forward-looking statements contained in this news release are based upon assumptions
which the Company believes to be reasonable, the Company cannot assure investors that actual
results will be consistent with these forward-looking statements. With respect to forward-looking
statements contained in this news release, the Company has made assumptions regarding:
completion of the Placement; regulatory approval for the Placement; the risks related to the use of
proceeds from the Placement; market volatility; negative effects of dilution on the market price of the
Company's ordinary shares; the ability to obtain permits for operations; sovereign risks associated
with the Company's foreign operations; the risks related to political instability and expropriation; the
uncertainty of the economic viability and estimation of mineral resources; the future price of minerals,
including gold, copper, and silver; success of the exploration activities and the specifications,
targets, results, analyses, interpretations, benefits, costs and timing of them; currency exchange
rate fluctuations; prospects, projections and success of the Company and its projects; assumptions,
limitations and qualifications in the Costa Fuego Technical Report; the timing and ability of the
Company to receive necessary regulatory approvals; environmental risks; labour and employment
risks; planned exploration programs and expenditures; current conditions and expected future
developments; current information available to the management of the Company; the general
business and prospects of the Company, as well as other considerations that are believed to be
appropriate in the circumstances. The Company has included the above summary of assumptions
and risks related to forward-looking information provided in this news release to provide investors
with a more complete perspective on the Company's future operations, and such information may
not be appropriate for other purposes. The Company's actual results, performance or achievement
could differ materially from those expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what benefits the Company will derive
therefrom.
For additional information with respect to these and other factors and assumptions underlying the
forward-looking statements made herein, please refer to the public disclosure record of the
Company, including the Company's most recent Annual Report, which is available on SEDAR+ (
www.sedarplus.ca
) under the Company's issuer profile. New factors emerge from time to time, and
it is not possible for management to predict all those factors or to assess in advance the impact of
each such factor on the Company's business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in any forward-looking
statement.
The forward-looking statements contained in this news release are expressly qualified by the
foregoing cautionary statements and are made as of the date of this news release. Except as may
be required by applicable securities laws, the Company does not undertake any obligation to publicly
update or revise any forward-looking statement to reflect events or circumstances after the date of
this news release or to reflect the occurrence of unanticipated events, whether as a result of new
information, future events or results, or otherwise. Investors should read this entire news release
and consult their own professional advisors to ascertain and assess the income tax and legal risks
and other aspects of an investment in the Company.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this news release. No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
SOURCE
Hot Chili Limited
View original content:
http://www.newswire.ca/en/releases/archive/May2024/01/c4016.html
%SEDAR: 00053528E
CO: Hot Chili Limited
CNW 09:24e 01-MAY-24