News Summary
On December 12, 2025, Rex Resources announced the closing of a non-brokered private placement for gross proceeds of $600,000. The company issued 10 million common shares at a price of $0.06 per share. The proceeds are designated to cover costs associated with the proposed reverse takeover (RTO) transaction with Bathurst Holdings Inc., including audit, legal, due diligence, and regulatory fees. A director of the company participated in the financing. The shares are subject to a statutory hold period of four months and one day, as well as a contractual hold period until November 30, 2026.
Material Impact
This financing is a necessary survival measure, not a sign of fundamental strength. The company’s June 30, 2025 financials revealed it was virtually out of cash ($14,816) with negative working capital of over $200,000, making it impossible to fund the administrative costs of the proposed RTO.
– Positive: The $600,000 raised keeps the company solvent and allows it to proceed with the potentially transformative RTO with Bathurst Holdings. Without this bridge financing, the transaction would likely have failed. The participation of a director provides a minor vote of confidence in the deal’s completion.
– Negative: The terms are highly unfavorable to existing shareholders. The $0.06 issue price represents a 25% discount to the last traded price of $0.08 and is at the 52-week low. More importantly, issuing 10 million shares is extremely dilutive, more than doubling the post-consolidation outstanding share count of approximately 8.2 million shares. This is a clear indication of the company’s weak negotiating position due to its desperate financial situation.
In essence, this is a routine “keep the lights on” financing for a shell company. While it enables the larger strategic pivot, the cost is significant dilution at a rock-bottom valuation. The true value driver is not this financing, but whether the RTO with Bathurst can be completed on favorable terms, including a subsequent, much larger financing.
Catalysts
– Definitive Agreement: The most critical near-term catalyst is the signing of a definitive agreement for the RTO, moving beyond the non-binding LOI announced on September 8, 2025.
– Concurrent Financing Terms: The RTO is contingent on a concurrent financing. The size, price, and terms of this financing will be crucial in determining the valuation of the new resulting company and the extent of further dilution.
– Resumption of Trading: The stock has been halted since September 5, 2025. News on the resumption of trading is critical for shareholder liquidity.
– Transaction Details: Watch for detailed disclosures regarding the share exchange ratio, the financials of Bathurst Metallic Corp., and the composition of the new management team and board of directors.
Materiality Conclusion
The financing is routine for a company in this position and is therefore rated Routine – Neutral. It addresses a critical lack of working capital but comes at the cost of severe dilution. The news confirms the company is still actively pursuing the RTO, but the underlying risks associated with the transaction remain very high.
