Earth Heat Resources (EHR) Capital Raising

The somewhat bumpy ride on the EHR train has continued in past days with a flurry of financing news. As MD Torey Marshall put it, “Project financing does not keep the lights on.”

In a slick move, EHR announced on the 7th of March that the company had raised $2.16 million by issuing shares at 3c to domestic and international sophisticated investors. The immediate result for shareholders, however, wasn’t so slick, with the share price diving to just below the issue price.

In what was perhaps a move to shore-up market support, the very next day (March 8), EHR announced it had mobilised crews to the site, thus “beginning the first phase of the field program which will support the commencement and efficient completion of the Bankable Feasibility Study.” The completion (and acceptance by the bankers) of this study will be a key landmark on the path to becoming electricity producers.

Marshall has suggested that this could occur by the end of 2013, but I would expect at least some technical delays given the huge number of geological variables in any project.

Finally, there is some indication that EHR is getting some attention – see this favourable coverage in the Australian Financial Review.

Update: In the end only $1.946 million was raised because some subscribers were not deemed to be sophisticated investors.