Alma Metals (ASX: ALM) has completed an oversubscribed $4 million placement to accelerate drilling and study work at its Briggs copper project in Queensland.
The placement was priced at $0.01 per share and attracted strong demand from existing institutional and sophisticated investors, including Lowell Resources Funds Management.
Proceeds will primarily fund drilling targeting resource growth and conversion of resources to a higher category resources to support the project’s pre-feasibility study.
The company will also use funds for metallurgical test work and environmental baseline surveys as it advances Briggs through the next stage of evaluation.
Funding Strengthens Briggs Program
The placement will comprise the issue of 400 million new fully paid ordinary shares, in two separate tranches.
Tranche 1 will raise about $3.682m through the issue of 368.2 million shares to non-related party investors, while the second will raise about $318,000 through the issue of 31.8 million shares to directors or their associates, subject to shareholder approval at an extraordinary general meeting expected in June.
The issue price represents a 16.7% discount to Alma’s last traded price of $0.012 on 28 April and a 23.8% discount to the April volume-weighted average price of $0.0131.
Managing director Frazer Tabeart said the oversubscribed placement reflected genuine investor confidence in Briggs and the work completed to advance the project.
“With this funding in place, we are well positioned to execute our drilling program and associated pre-feasibility studies, all at a time when the fundamentals for large-scale copper assets in Tier-1 jurisdictions have rarely been stronger,” he said.
Earn-In Pathway Supported
On completion of the placement, Alma expects to hold about $5.6m in cash plus $3.1m in liquid investments to deploy into the Briggs program.
The company expects the strengthened funding position will allow it to meet its exploration and evaluation obligations to reach a 70% joint venture interest in Briggs under its agreement with Canterbury Resources (ASX: CBY).
Alma currently owns 51% of Briggs and acts as project manager under the option and earn-in joint venture agreement.
After Alma reaches 70%, each party must contribute its share of future costs or dilute under standard industry provisions.
Large Porphyry Copper System
Briggs is a large porphyry copper deposit with the potential for low to very low strip ratio open pit mining where Alma sees the chance to expand tonnage and grade through ongoing drilling.
The project’s mineral resource estimate contains 2 million tonnes of copper metal in Indicated and Inferred resources at a 0.15% copper cut-off grade.
Metallurgical test work has confirmed potential for 95% copper recovery into high-grade concentrates grading 23% to 29% copper at coarse primary grind sizes of 212 micrometres, while also containing molybdenum and silver at potentially economic levels.
Briggs is located 60 kilometres from the deep-water port of Gladstone and close to high-voltage power lines, a heavy-haulage railway, gas pipelines, and major roads including the Dawson Highway.
Alma said the project’s scale, open pit potential, infrastructure access, local skilled workforce, and straightforward land ownership enhance its feasibility and potential economic viability.
