Shareholders have snubbed a $7.8 million China Magnesium rights issue, taking up just 0.3 per cent of the shares offered.

China Magnesium (ASX:CMC) last month launched an ambitious rights issue offering shareholders one new share at 5c for every two shares held — a 92 per cent premium on the previous day’s closing price.

The offer also included a free unlisted option (exercisable at 10c by February 2019) for every new share offered.

China Magnesium shares are trading at about 2.8c – having ranged between 1.4c and 3.3c over the past year.

Eligible shareholders took up 541,522 shares under the rights issue – or 0.3 per cent – raising just $27,076.

China Magnesium thanked shareholders “for their continued support” and said it has already received applications for the $7.475 million shortfall.

The company has been contacted for comment.

The China Magnesium (ASX:CMC)share price over the past 12 months.
The China Magnesium (ASX:CMC)share price over the past 12 months.

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