Ethiopia-focused explorer Megado Gold has closed a $6 million initial public offering (IPO) launched earlier this month following strong support from the global investment community.
Managed by Canaccord Genuity (Australia), the IPO offered 25 million ordinary shares at $0.20 each to raise a minimum $5 million and was able to take $1 million in oversubscriptions.
It was significantly oversubscribed with Megado welcoming a number of new institutional and sophisticated shareholders to its register.
Megado managing director and chief executive officer Michael Gumbley said demand for the IPO reflected a strong and sustained gold environment, as well as global equity market interest in pursuing new opportunities in Africa’s less-developed, mineral-rich regions.
Megado expects to list on the ASX in the middle of October using the ticker code ‘MEG’.
Upon listing, it will have 71 million ordinary shares on issue, valuing the Perth-based explorer at $14.2 million.
Megado was established in March last year to focus on gold exploration in underexplored areas of Ethiopia along strike of existing gold mines.
It has more than 500sq km of prospective tenements in its portfolio in areas with geological potential to host gold deposits of significant scale, with some of the ground believed to be analogous to Western Australia’s eastern goldfields region.
The company has numerous high-priority targets along the famed Arabian-Nubian Shield including the wholly-owned Mormora, Dawa and Chakata projects, and the Babicho and Chochi projects in which Megado has 80% equity in partnership with Ethiopian investors.
Ethiopia hosts a number of major gold interests including MIDROC Gold’s 3-million-ounce Lega Dembi and Sakaro mines, KEFI Minerals’ 1.7Moz Tulu Kapi deposit and Allied Gold Corp’s 1.5Moz Dish Mountain deposit.
Megado has engaged experienced local geologists and drilling contractors with a view to launch a maiden drilling program in land-locked Ethiopia before year end.
Megado executive director Dr Chris Bowden said the team will mobilise within weeks to drive the exploration agenda outlined in the IPO prospectus.
“[We are] fortunate to have in-country personnel on our exploration team who are well acquainted with exploring the region,” he said.
“Our aggressive fieldwork program is underway and an impending drilling campaign schedule points to what we believe will be a significant news flow post listing,” Dr Bowden added.