Andean Silver raises $25m to advance exploration at Cerro Bayo project

Andean Silver (ASX: ASL) has received firm commitments from institutional and sophisticated investors to raise $25 million for resource conversion and exploration activities at its Cerro Bayo project in Chile.

The funds will be raised through the placement of 23.8 million shares priced at $1.05 each, representing a 10.3% discount to the last sale price of $1.17 and a 6.1% premium to the 15-day volume-weighted average price.

On completion, Andean will have approximately $32.8m cash on hand to enable ramped-up exploration at Cerro Bayo using at least four drill rigs across brownfield and greenfield targets.

Growth outlook

Chief executive officer Tim Laneyrie said overwhelming demand by quality investors reflected the exploration and resource growth outlook at Cerro Bayo, which Andean acquired in February.

“In just seven months of ownership, our team has delivered a resource increase of 66 million ounces silver equivalent at this project and has made significant discoveries which remain outside of the mineral resource estimate,” he said.

“The proceeds of this placement will mean we can add extra firepower to discovery and resource conversion with up to four drill rigs onsite over the coming months.”

Resource upgrade

The company remains on target to deliver the next resource upgrade early next year.

“We look forward to future results from the Pegaso 7, Droughtmaster and Cristal prospects and multiple other new targets as we strive to further expand this resource,” Mr Laneyrie said.

“We continue to demonstrate the potentially significant scale of Cerro Bayo at a time when the demand for silver is increasing and stockpiles are being drawn to meet the demand in areas such as solar panel construction.”

The Cerro Bayo project hosts a resource estimate of 8.3 million tonnes grading 341 grams per tonne for 91Moz, covering previous operating areas of the Cerro Bayo and Laguna Verde mine complexes and excluding all high-grade silver-gold intersected at the Pegaso 7 and Cristal prospects.