Minerals 260 shares (ASX: MI6) sat at the bottom of the ASX 200 leaderboard to start the week, falling 10.64% to A$0.84. Coming in off the back of a huge YTD rally, what caused the sudden shift in momentum?
The pullback came as the MI6 share price once again ran into resistance near the A$0.95 level, a ceiling that has capped several recent rally attempts. The immediate pressure point was the pricing mechanics of a capital raise, with both the $250 million institutional placement and the accompanying $30 million Share Purchase Plan (SPP) priced at A$0.88 per share. Despite the double digit decline on the day, MI6 remains one of the standout performers on the ASX 200 year-to-date, having added more than 95% in 2026 on the back of rapid resource expansion at its flagship Bullabulling Gold Project in Western Australia.
Why are Minerals 260 shares down?
The capital raise is has clearly put the brakes on the rally, with the $250 million two-tranche institutional placement, priced at A$0.88 per share, resulting in the creation of approximately 284.1 million new ordinary shares. The SPP, which opened alongside the placement and runs through October 19, 2026, offers eligible shareholders the opportunity to participate at the same A$0.88 price, with the company targeting up to an additional $30 million from that channel. Directors have indicated they intend to participate in the SPP, a signal of internal confidence in the raise’s pricing.
The equity component, however, is only part of the story. Franco-Nevada Corporation, one of the world’s most respected gold royalty and streaming companies, has meaningfully expanded its existing partnership with Minerals 260. Under the new agreement, Franco-Nevada has agreed to purchase an additional 1.45% gross royalty over the Bullabulling project for A$170 million, lifting its total gross royalty position over the asset to 3.90%. The royalty giant also served as the lead cornerstone investor in the institutional placement, contributing A$30 million directly.
The cumulative financial commitment from Franco-Nevada now stands at approximately A$420 million, a figure that carries significant weight as a third-party validation of the project’s long-term economics. When combined with Minerals 260’s existing cash balance of approximately A$183 million, the placement proceeds, and the SPP target, the company’s pro-forma capital pool is estimated at between A$603 million and A$633 million. Management has indicated this fully funds the equity component required to advance Bullabulling toward a Final Investment Decision (FID), currently targeted for early 2027.
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The Bullabulling Gold Project itself has grown considerably in scale. The asset now carries a JORC-compliant resource of 6.2 million ounces of gold, nearly three times its earlier size following a series of resource upgrades. The project is targeting first gold production in the second half of 2028, with an annual production rate of between 150,000 and 200,000 ounces per year envisaged at steady state, positioning Bullabulling as a meaningful mid-tier gold producer in Western Australia’s established Goldfields region.
What lay ahead
From a technical standpoint, the A$0.95 resistance level has now proven significant on multiple occasions, and Monday’s rejection from that zone reinforces its role as a near-term ceiling. The placement price of A$0.88 is likely to act as a support reference in the weeks ahead, particularly as SPP participants and placement recipients assess their cost bases. A sustained move back above A$0.95 would likely require either a positive gold price catalyst or a material project development update.
