Australian Mines has blamed a broker for leaking details of a capital raising to fund a cobalt mine in Queensland.

Australian Mines (ASX:AUZ) jumped 40 per cent to 14c today after announcing a heavily over-subscribed placement raised $20 million.

But the ASX noted a newspaper article featured details of the placement “prior to any announcement being released”, and asked Australian Mines (ASX:AUZ) if it had “conveyed information to the media”.

“Absolutely not,” the explorer replied.

While its securities were in a trading halt, “someone who described themselves as an AUZ shareholder” published key terms of the placement on the Hot Copper investor forum, the company said.

The post — which now seems to have disappeared from Hot Copper — provided information including the 8.5c issue price, range of shares to be placed and the $7 million to $10.2 million amount to be raised.

The post appeared to be published by “Phillip321”.

“Upon further investigation by the company’s legal team, it appears that individual is an Australian broker, whose firm did not have any legal relationship with the company in this placement,” AUZ said.

AUZ had a strict policy that no director, employee or agent acting on its behalf should participate on the Hot Copper forum or any other investment-related social media platform.

Following inquiries, AUZ said it was satisfied the information wasn’t provided to Hot Copper by a representative of Australian Mines or its corporate advisors.


AUZ's share price over the past month. Source:
AUZ’s share price over the past month. Source:

Oversubscribed placement

AUZ revealed today that the placement was oversubscribed by triple the amount sought, receiving applications for almost $40 million from international institutional investors.

AUZ  accepted $20 million in applications for 235.3 million shares at 8.5c each.

Institutional investors included one of the world’s biggest investment managers as well as a leading Asian-based resources investor.

“The willingness of these global funds to invest in Australian Mines is seen by the company as a strong endorsement of the quality of its projects, the development strategy being pursued of these assets, and the strength of the company’s management team,” AUZ said.

The cash will fund continuing trial mining and sample production at the Queensland “Sconi” cobalt project as well as a feasibility study.

The money will also help ramp up resource expansion drilling at its “Flemington” cobalt-scandium-nickel project in NSW.