Aurumin raises capital and clears debt, sets stage for Sandstone gold project expansion
Aurumin (ASX: AUN) is in a strong position to accelerate development plans at its Western Australian projects after conducting a successful capital raising and removing a convertible note from its books.
The company has attracted $2.5 million in backing via a share placement that was well-supported by both existing and new shareholders.
The positive response to the placement follows Aurumin’s issue of a final redemption notice to Collins St Asset Management to repay the $1.07m balance outstanding on the note.
Paid off with available cash, the removal of the convertible note leaves the company free of debt.
Debt-free
“We are very pleased to have cleared the remaining balance of the convertible note and thank Collins St, existing shareholders and directors for their support of the placement,” managing director Brad Valiukas said.
“Aurumin is now debt-free with a strong cash position, having transformed the balance sheet and we are unlocking potential for growth.”
“We look forward getting out and drilling at our flagship Sandstone gold operations ASAP.”
“Following recent divestments, Aurumin is strongly focussed on the Sandstone project and will look to generate the critical mass required for future production starting with open pits.”
Aurumin’s directors and management continue to have “skin in the game” and were strong participants in the $2.5m raising, investing a collective $396,000.
Sandstone development plans
Aurumin spent a good amount of effort in the final stages of last year strategically building up its Sandstone gold position and strengthening its bank balance, while finalising the sale of non-essential assets.
In late December the company successfully completed the sale of its Mt Dimer mining leases and miscellaneous licences in WA to Beacon Minerals (ASX: BCN), adding $3m in cash to its coffers.
Those funds and the new capital injection have Aurumin well-placed to focus on rejuvenating the historic Central Sandstone project, the acquisition of which in early 2022 greatly enhanced the Sandstone gold operations.
Those operations currently consist of an 881,300-ounce gold mineral resource, significant project infrastructure and an expanding tenement footprint.
Lightly-explored tenements
Aurumin was granted four exploration tenements at the Central Sandstone gold project late last year as part of its growth strategy.
All four tenements are relatively lightly-explored, with several further consolidating Aurumin’s position on the greenstone trend.
One of the four, licence E57/1254, contains three historic gold mines and adjoins Aurumin’s E57/1140 permit in the central Sandstone gold project area.
The Queen of the Range, Welcome and Phoenix mines were operated in the early 1900s and produced 197 tonnes of ore at 10.58 grams per tonne gold, 376t at 27.45g/t gold and 82t at 5.92g/t gold respectively.
More recent exploration work has confirmed there is still high-grade gold potential within E57/1254.
The company also holds the Johnson Range project, located midway between Southern Cross and Sandstone, which has a mineral resource of 64,700oz at 2.51g/t gold.