Ongoing global demand for nickel and copper together with a strong gold price environment are the driving forces behind an initial public offering launched this week by Dundas Minerals.
The Perth-based junior hopes to raise a maximum $6 million through the issue of shares priced at $0.20 each, providing funds to implement its exploration strategies across a 1,152 square kilometre ground position in Western Australia’s Southern Albany-Fraser Orogen.
The region is one of the most sought-after mineral districts in the state and has hosted several company-maker discoveries including the Nova-Bollinger nickel deposit (owned by IGO, ASX: IGO) and the Tropicana gold mine (AngloGold Ashanti, ASX: AGG).
Last year, Legend Mining (ASX: LEG) also staked its claim in the Orogen, unveiling the Mawson prospect at its Rockford nickel-copper-gold-zinc-silver project.
Dundas has also committed to a pro-rata non-renounceable entitlement issue of options to existing shareholders registered as members of the company three months following its proposed listing in November.
The options are expected to be offered under a separate prospectus on a one-for-two basis at an exercise price of $0.30 each and an expiry date of two years post-issue.
Ventnor Securities has been appointed lead manager for the public offering.
Dundas Minerals will use the ticker code “DUN”.
Since its incorporation in April last year, Dundas has focused on raising seed capital to fund the exploration of the Dundas and Triton nickel-gold-copper projects along the Albany-Fraser Orogen, and the completion of initial geophysical surveys.
The company has assembled a compelling pipeline of exploration prospects at various stages of maturity across the Orogen.
It holds four granted exploration licences and eight licence applications, including one held by a third party which it has exclusive right to acquire upon grant.
The tenements were selected based on their potential to host economic mineralisation.
All but one form the early-stage Dundas project – which straddles the Biranup Complex over approximately 1,106sq km and 11 contiguous tenements – while the remaining licence which covers 46sq km is referred to as Triton.
The Dundas project is believed to have a gold-focused exploration history with limited drilling completed in parts of the area before 1995.
From 1995 to 2011, a series of strongly-clustered and spatially-distributed exploration works by various companies comprised calcrete and soil sampling, and shallow aircore or rotary airblast drilling, with nearly all holes drilled to a depth of less than 50m.
These companies placed exclusive priority on the search for gold, leaving large tracts of the project area unexplored.
Dundas has since identified multiple gold and nickel anomalies in the area which present it with an immediate pipeline of high-priority targets to work on post-listing.
These will include the Jumbuck, Norseman, Kokoda, Mulga, Bullseye and Terra legacy prospects.
The company plans to use up to $3.9 million of IPO proceeds on exploration which includes a recently-completed airborne electromagnetic survey and a ground gravity survey which commenced this month.
Information from these surveys will be combined with existing magnetics and geochemistry and is expected to identify further opportunities for future exploration.
Unlike Dundas, the advanced Triton project has been the site of considerable past exploration which has located widespread gold anomalism in soil samples and significant gold anomalism in drillholes.
The company said additional deeper drilling along with geophysics and geochemistry would be required to better understand the geological setting and mineralisation on the tenement.
It plans to invest $62,000 in IPO funds to test the gold anomalism and re-assess various geophysical datasets with a view to selecting drilling locations.
Triton’s prospectivity will be ranked against the Dundas targets to establish allocation of ongoing working capital and resources.