Alto Metals raises $5m to advance exploration at Sandstone gold project
Junior explorer Alto Metals (ASX: AME) has secured firm commitments for a $5 million capital raising to advance exploration at its wholly-owned Sandstone gold project in Western Australia.
The funds will be raised via the placement of 96.2 million new and fully-paid ordinary shares at $0.052 each and will help drive further resource growth and new discoveries.
Alto directors have committed their support for the placement by subscribing to 2.8 million shares for a combined spend of $148,000.
The company has also agreed to a place approximately 8.1 million shares for $420,000 under a drill-for-equity arrangement (or drilling agreement) at the same issue price.
Throwing in their support in the raise was Lion Selection Group (ASX: LSX) with a whopping $1 million.
Overwhelming support
Managing director Matthew Bowles said the placement had received “overwhelming support”.
“It is a strong endorsement of the quality of the Sandstone project, which continues to deliver outstanding results,” he said.
“This capital raising will see us fully-funded for the remainder of this year as well as the next 12 months… [in the meantime] we look forward to receiving latest assays from over 4500m of drilling at Indomitable, targeting potential high-grade structures in the primary rock at depth, and rigs are ready to be mobilised to follow up on these pending results.”
Two tranches
Alto’s placement will be completed in two tranches, with the first comprising the issue of 101.3 million shares under the drilling agreement and to institutional, professional and sophisticated investors; and the second issuing a further 2.8 million shares for director participation.
The issue price of $0.052 represents a discount of 7.1% discount to Alto’s last traded price and 11.3% to the 30-day volume weighted average price.
Taylor Collison was appointed lead manager and bookrunner to the placement and will be paid a 6% fee on funds raised.
Growing resources
Alto’s focus remains on further growing the existing resources within the Alpha Domain at Sandstone, while reviewing multiple brownfield prospects as part of a long-term strategy to advance its project pipeline.
Placement funds will be put towards ongoing extensional and resource drilling at the Indomitable and Vanguard targets, where drilling has targeted higher-grade structures at depth within the fresh rock.
New work over the coming months will include up to 10,000m of extensional and resource reverse circulation drilling and 3000m of diamond drilling at Indomitable, targeting high-grade primary mineralisation; 5000m of extensional and resource reverse circulation drilling at Vanguard; first-pass drilling at a number of historic gold workings at Hacks West and regional targets; and low-cost lithium exploration at a number of prospective targets around Sandstone.
Funds will also be used for follow-on phases of exploration, resource drilling and evaluation of priority regional gold targets as well as corporate and general working capital purposes.