A week after releasing a promising scoping study for its Mt Ida gold project, Alt Resources (ASX: ARS) has locked in $4 million through an oversubscribed share placement, with a strong show of support from both existing and new shareholders.
The junior gold explorer emerged from a trading halt this morning to announce it had received firm commitments to raise $4 million at $0.025 per share before costs.
Two hours later, the company released an exploration update announcing it will re-commence diamond drilling at Mt Ida in Western Australia around the end of this month, to be followed by reverse circulation drilling in September.
Capital raising to accelerate drilling
According to Alt, funds raised from the share placement will go towards the ongoing development of its Mt Ida and Bottle Creek gold project, including resource and exploration drilling, the development of a maiden ore reserve statement and a feasibility study.
Proceeds will also be used for vendor payments and general working capital purposes.
The first tranche of the placement, to raise $2.125 million, is expected to be completed on or around this Friday.
The second tranche, raising an additional $1.875 million, will be completed subject to shareholder approval at a general meeting around mid-September.
Alt chief executive officer James Anderson said the oversubscribed placement was an “outstanding results for the junior end of the gold sector, which has struggled over the past 12 months”.
Mr Anderson said the support from investors was a strong endorsement of the recent exploration results, the potential investors are starting to see in the company, as well as a great job by the sole lead manager for the placement, DJ Carmichael Pty Ltd.
“The company can now maintain drilling operations and continue to move the Mt Ida project forward towards development of a small-scale mining operation,” he said.
The successful capital raising comes a week after the company released its Mt Ida scoping study, which confirmed the project’s potential for a “robust” and “low cost” standalone open pit gold operation.
According to the study, it would cost an estimated $30 million to develop a 500,000 tonne-per-annum operation that could produce 181,200 ounces of gold and 937,800oz silver over an initial six-year mine life.
In today’s exploration update, the company said it will begin two diamond drilling programs later this month. These will include four geotechnical holes at Tim’s Find, for pit design and permitting approval purposes, plus two deep exploration holes at Bottle Creek.
The Bottle Creek drilling campaign is being 50% funded by the WA Government through an exploration incentive scheme funding grant awarded to the company last year.
Then, in September, Alt is planning to start the next stage of its RC drilling program, which will focus on expanding the Mt Ida resource.
Planned drilling will aim to expand known mineralisation at the Cascade, Boags and Tim’s Find resource areas.
Alt also expects to release results from recent RC drilling at the Shepherds Bush and Spotted Dog prospects later this week, with results from Forrest Belle and Pianto’s anticipated in the coming weeks.
Follow-up drilling of two of these prospects, Pianto’s and Shepherds Bush, is already scheduled within the next phase of RC drilling.
Now is looking like the perfect time for Alt to speed up its development of the Mt Ida gold project, with the gold price today pushing past A$2,120/oz.