Explorer E2 Metals (ASX: E2M) has received $13 million in firm commitments for a placement of new shares to help fund “the most aggressive program to date” at its flagship Conserrat project in Argentina.
The company announced today that strong support had been shown from the domestic and international investment community which will allow it to proceed with follow-up drilling at the new Mia gold-silver discovery, as well as up to 10,000m of scout drilling at other regional prospects.
Funds will also be used for preliminary technical studies at Conserrat and for general working capital.
E2 managing director Todd Williams said the placement was an important step in advancing exploration at Conserrat, located in the prolific Santa Cruz province.
“We are of the view that Conserrat has the hallmarks of a large epithermal gold and silver vein district and that Mia is just the first chapter of this new and exciting story,” he said.
“The proceeds [of our placement] enable us to accelerate exploration and embark on the most aggressive drill program completed to date [and] we are excited by the prospect of further discoveries at Conserrat.”
Approximately 17.8 million new shares at $0.73 each will be issued under the placement, which was jointly managed by Argonaut Securities and Canaccord Genuity.
The distribution will fall within the parameters of E2’s existing capacity for new equity issuances under ASX rules and will therefore be exempt from shareholder approval.
The placement price represents a 16.1% discount to the last price of $0.87; an 11.5% discount to the 10-day volume weighted average price of $0.82; and a 6.9% discount to the 15-day VWAP of $0.78.
In October, E2 revealed a bonanza-grade intercept from the Mia discovery which it claims shows the potential of Conserrat.
Drilling was designed to test extensions of high-grade assays announced earlier this year, which included 8m at 7.46 grams per tonne gold and 216g/t silver.
The company reported an 18m intersection grading 47g/t gold and 208g/t silver starting from a depth of 66m, including 1m at 424g/t gold and 1,489g/t silver from 68m.
Mr Williams said the intercept confirmed Mia as a “genuine greenfields discovery” and compared it to some of the world’s best gold and silver epithermal vein systems with respect to grade and thickness.