KUALA LUMPUR (May 6): Loss-making Niche Capital Emas Holdings Bhd has proposed to undertake a private placement of up to 135.74 million shares, or 10% of its issued share capital, to fund its mining business as well as working capital.
The private placement is expected to raise RM18.7 million based on an indicative price of 13.78 sen per placement share, according to the group’s filing with Bursa Malaysia.
A total RM14.6 million of the gross proceeds will be used for the construction of a gold processing plant and other infrastructure work, to acquire a heap leach gold processing plant with a capacity of 95,000 tonnes per month, as well as for further resource determination and ongoing exploration activities.
The group’s filing showed that RM3.4 million of the gross proceeds will be used for working capital and RM700,000 for estimated expenses of the proposed private placement.
According to Niche Capital, the average gold price has continued to rise in the past three years from US$1,799.63/oz in 2021 to US$1,800.60/oz in 2022 and US$1,942.67/oz in 2023. Further, the World Gold Council has anticipated positive developments for gold, supported by elevated geopolitical risks and the flattish US dollar, which are favourable to the group’s gold mining operation.
M&A Securities has been appointed as the principal adviser and placement agent of the proposed private placement, which is expected to be completed by the third quarter of 2024.
Niche Capital has been loss making since the financial year ended June 30, 2019.
For the first half ended Dec 31, 2023 (1HFY2024), the group recorded a RM6.04 million net loss against a net profit of RM1.05 million a year earlier on higher mining operating costs.
Revenue for 1HFY2024, in contrast, jumped more than seven times to RM18.43 million from RM2.43 million, boosted by higher revenue from the trading of jewellery products as well as the group’s construction and services segments.
Shares of Niche Capital closed unchanged at 14 sen on Monday, valuing the group at RM190.04 million.