PNX Metals Limited (ASX: PNX) ('PNX', 'the Company') is pleased to announce that it has received firm commitments for a placement to eligible professional and sophisticated investors, including existing substantial shareholder DELPHI Unternehmensberatung Aktiengesellschaft ('DELPHI'), of 378,333,333 fully paid ordinary shares in the Company at an issue price of 0.6c per share (New Shares) to raise approximately $2.27 million before costs.

Significant support shown by existing key shareholders and new investors is a strong endorsement of the Fountain Head Gold Project ('Fountain Head' or 'Project') and the Company's exploration and development strategy, and will facilitate de-risking of the next stage of Project development.

The proceeds of the Offer will be used to accelerate activities at the 100% owned Fountain Head gold and Hayes Creek zinc-gold-silver Projects including feasibility work and Government and Environmental approvals submission.

Near-mine and regional gold exploration will also re-commence to test new exploration targets with the potential to host additional gold resources, identified during a recent geological review of the Company's significant exploration portfolio also located approximately 170km south of Darwin in the Pine Creek region of the Northern Territory.

Managing Director's Comments

PNX Managing Director James Fox said: 'This support for the Company through a Placement and Rights Issue is a strong endorsement of the quality of PNX's Northern Territory exploration and development assets that include the 100% owned Fountain Head gold and Hayes Creek zinc-gold-silver Projects. We would like to thank existing shareholders for their continued support of the Company's exploration and development strategy.

Exploration will be rapidly advanced, and will include drill testing newly identified target areas that lie within a three-kilometre radius of Fountain Head that have the potential to add materially to the existing gold resource base. We look forward to delivering on the potential for the Projects to create significant value for the Company's shareholders.'

Details of the Offer

The non-renounceable pro-rata Rights Issue will be undertaken on the basis of one (1) New Share for four (4) existing shares held, at an issue price of 6c ($0.006) to raise approximately $4.4 million (before costs and expenses).

The issue price of 0.6c under the Offer represents an approximate 30.69% discount to the volume weighted average market price of PNX shares for the five trading days prior to 26 November 2020, and a discount of approximately 25% to the Company's last closing price of $0.008 on 25 November 2020.

Following the issue of the 378,333,333 shares relating to the Placement to eligible professional and sophisticated investors, the maximum number of New Shares to be issued under the Rights Issue is 730,238,702 (based on the undiluted share capital of PNX Metals as at the close of trade on 25 November 2020, without taking into account the impact of rounding).

The Rights issue is expected to raise up to $4.4 million (before costs and expenses). The Rights Issue is non-renounceable. This means that a shareholder's right to subscribe for New Shares under the Rights Issue is not transferable

Other Matters

New Shares being offered under the Rights Issue will be offered to registered holders of shares with registered addresses in Australia, New Zealand, Germany, Singapore, Hong Kong, the United Kingdom and Malaysia as at 6:30pm Adelaide time on 3 December 2020 ('Eligible Shareholders'). These shareholders will be entitled to participate if they are a registered holder on the Record Date. Shareholders will be able to rely on the exception for rights issues in item 10 of section 611 of the Corporations Act in relation to an application for their Entitlements.

Existing shareholders can apply for additional New Shares above their allocated Entitlements in accordance with the Offer, provided that no shareholder will be able to increase its shareholding above 20% as a result of taking up shortfall.

Holders of existing options for PNX shares have been given notice of their right to exercise their options in order to be eligible to participate in the Rights Issue in respect of the shares underlying their options. The Rights Issue will be conducted without a prospectus in accordance with section 708AA of the Corporations Act 2001 (Cth) (Act).

The application for quotation of New Shares will be lodged with the ASX on completion of the Rights Issue.

Use of Funds

The proceeds of the Offer will be used for the following: to undertake significant activity at the 100% owned Fountain Head Gold Project and at the Hayes Creek zinc-gold-silver projects including feasibility and Government and Environmental approvals submission; near mine and regional exploration; project assessments and potential acquisitions of 'bolt-on' assets; general corporate costs and costs associate with the Offer.

Contact:

James Fox

Tel: +61 (0) 8 8364 3188

Email: james.fox@pnxmetals.com.au

(C) 2020 Electronic News Publishing, source ENP Newswire