Junior explorer Astral Resources (ASX: AAR) has secured firm commitments to raise $3 million for advanced resource definition drilling and technical and feasibility studies at its wholly-owned Mandilla and Feysville gold projects in Western Australia.
The capital raise will take place via a single-tranche share placement comprising the issue of approximately 46.2 million shares at $0.065 each.
The price represents a 15.7% discount to the five-day volume weighted average price of $0.077 and a 9.5% discount to the 30-day VWAP of $0.072.
Strong support
Managing director Marc Ducler was pleased with the strong support received.
“We are delighted with the level of commitment from new and existing investors, particularly in this current challenging market environment,” he said.
“It continues to validate our company’s quality asset base and strategy.”
Following the placement, Astral will have 765.95 million shares on issue.
Share purchase plan
Astral has also announced the launch of a non-underwritten share purchase plan to raise an additional $2 million.
The plan will be open to eligible shareholders at the same issue price as the placement.
Melbourne-based Cumulus Wealth Pty Ltd has been appointed lead manager to both capital raisings.
Fast-tracking exploration
Astral is fast-tracking exploration at the Mandilla and Feysville projects where it has firmed up 1.15 million ounces in gold resources to date, with the goal of rapidly building inventory to support mine development.
Last month, the company announced an upgraded mineral resource estimate at Mandilla which produced a 22% increase in total contained ounces and a 69% increase in indicated resources to 694,000 ounces led by a significant input from the project’s Theia deposit.
Mr Ducler said it was the fifth successive resource update in 26 months and confirmed the company’s ability to grow the project while conducting a predominantly infill drilling program.
He described Mandilla as the “single largest gold resource held by a junior explorer” in the region between Kalgoorlie and Norseman.
Feysville resource
Feysville has a current resource of 3 million tonnes grading 1.3 grams per tonne gold for 116,000oz.
In January, Astral drilled nine holes for 1426 metres at the project, along with a 26-hole reverse circulation program for 2554m.
Preliminary results showed high-grade and broad gold zones had been intercepted.
