Aurumin well-positioned to advance new tenements at Sandstone gold project

A $2.5 million capital raising and the granting of additional tenements at the Sandstone gold project in Western Australia have left Aurumin (ASX: AUN) in a strong position to advance its flagship asset.

The company received firm commitments for the placement from new and existing shareholders, which will result in the issue of approximately 78 million shares at $0.032 each.

Bids were received well in excess of the offer size and scaled back accordingly.

Directors and management, as well as Collins Street Asset Management, made a total commitment of approximately $1m.

The positive response to the placement follows Aurumin’s issue of a final redemption notice to Collins Street to repay a $1.07m balance outstanding on the note.

Aurumin said it was now debt-free and well-funded to advance Sandstone.

Equity agreement

Also in March, Aurumin renewed an equity agreement with Perth-based contractor and Aurumin shareholder Topdrill.

The agreement allows Aurumin to satisfy up to 50% of drilling costs invoiced by Topdrill through the issue of ordinary Aurumin shares up to a maximum of $1m.

It is expected to give Aurumin the flexibility to increase drilling while preserving its cash reserves.

High-grade tenement

In January, Aurumin was awarded a new strategic high-grade tenement containing three historic gold mines adjoining an existing exploration permit in the central Sandstone project area.

The grant followed the company’s previous success in significantly expanding its landholdings at Sandstone with the award of three other tenements that make up part of the 881,000-ounce Central Sandstone gold project.

The Sandstone gold operation was the centrepiece of Aurumin’s acquisition of the project in early 2022.

It includes significant infrastructure and an expanding tenement footprint where the company aims to support a future gold mining operation.

Central Sandstone drilling

Managing director Brad Valiukas said drilling had commenced at Central Sandstone earlier this month.

“Directly following the end of the [March] quarter, we were excited to be back on the ground and drilling seven new targets and two extensional positions,” he said.

“We are focused on Central Sandstone and generating the critical mass required for future production, targeting additional open pit material to support an operational restart.”