Endomines - Starting a new chapter
Trading with the company’s shares in Nasdaq Helsinki commences today under ticker PAMPALO. Endomines raised gross proceeds of EUR 13m which are used especially for exploration activities along the Karelian gold line. With the funding, the company is starting a new chapter as it begins to implement its updated strategy on a larger scale. We update our target price to EUR 5.4 (SEK 59), HOLD-rating intact.
Endomines raised gross proceeds of EUR 13m
The public offering of Endomines Finland was oversubscribed yet the company’s BoD did not exercise the one million share upsize option. Therefore, the gross proceeds from the offering stayed at EUR 13m, with EUR 4m paid in cash and roughly EUR 9m paid by setting of the outstanding receivables based on the convertible loans issued by Endomines Finland. The result of the offering was in line with our prior assumptions.
Financing secured, strategy implementation ahead
Despite the dilution effect from the offering, we see the completion of the offering positive for the investment case. The company has now resources to begin larger scale exploration activities in the Karelian gold line which is one of the company’s strategic focus areas. The funding also allows management to focus on wider strategy implementation such as ramping up the Karelian gold line gold concentrate production and partnerships and/or asset sales in the United States. In addition, the company’s annual financing costs decrease as part of the offering is paid by convertible note conversion.
HOLD with a target price of EUR 5.4 (SEK 59)
Our view of the company remains largely unchanged from the previous update. Even though we see the completion of the offering as a great enabler for the company’s strategy implementation, we still see uncertainty regarding the successfulness of the company’s exploration activities and the value realization of the US assets. We update our target price to EUR 5.4 (SEK 59), HOLD-rating intact.
The public offering of Endomines Finland was oversubscribed yet the company’s BoD did not exercise the one million share upsize option. Therefore, the gross proceeds from the offering stayed at EUR 13m, with EUR 4m paid in cash and roughly EUR 9m paid by setting of the outstanding receivables based on the convertible loans issued by Endomines Finland. The result of the offering was in line with our prior assumptions.
Financing secured, strategy implementation ahead
Despite the dilution effect from the offering, we see the completion of the offering positive for the investment case. The company has now resources to begin larger scale exploration activities in the Karelian gold line which is one of the company’s strategic focus areas. The funding also allows management to focus on wider strategy implementation such as ramping up the Karelian gold line gold concentrate production and partnerships and/or asset sales in the United States. In addition, the company’s annual financing costs decrease as part of the offering is paid by convertible note conversion.
HOLD with a target price of EUR 5.4 (SEK 59)
Our view of the company remains largely unchanged from the previous update. Even though we see the completion of the offering as a great enabler for the company’s strategy implementation, we still see uncertainty regarding the successfulness of the company’s exploration activities and the value realization of the US assets. We update our target price to EUR 5.4 (SEK 59), HOLD-rating intact.