Navarre Minerals (ASX: NML) has launched a $9.5 million capital raising to fund resource growth at the Mt Carlton gold operation in north Queensland.
The company plans to raise $4.5 million via a share placement and up to an additional $5 million via a non-underwritten share purchase plan (SPP).
The raising will allow for the acceleration of exploration activities at the recently-acquired project following positive drilling results which confirmed potential for additional reserve and resource growth.
Drilling at the Mt Carlton United gold-silver-copper deposit showed “outstanding” grade and continuity with intercepts grading up to 22.9 grams per tonne gold, 1,327g/t silver and 4.2% copper.
The results are expected to contribute to an updated resource estimate for Mt Carlton United, and upgraded estimates for satellite deposits including Delta, BV7 and Telstra Hill.
The $4.5 million placement will comprise an offer of new fully-paid ordinary shares in Navarre to eligible investors at $0.066 per share.
It will result in the issue of approximately 68.2 million shares representing approximately 4.9% of Navarre’s existing issued share capital.
Navarre expects an increase in its free float and liquidity with the company’s significant shareholders Evolution Mining and Agnico Eagle electing not to participate in the placement.
The placement will be managed by Ord Minnett.
Following completion of the placement, Navarre will offer eligible shareholders the opportunity to participate in a non-underwritten SPP to raise up to an additional $5 million.
Applications will be invited for up to $30,000 of shares issued at the same price as the placement, free of any brokerage or other transaction costs.
Navarre managing director Ian Holland said the capital raising was being initiated at an “exciting time” in the company’s history.
“Since taking ownership of the Mt Carlton operation last year, our team has materially advanced our understanding of the project and its prospectivity which has resulted in the production of highly-encouraging and quality drilling results from virtually all of the satellite deposits,” he said.
“With momentum building at Mt Carlton, we believe the time is right to step up exploration activity as we look to expand the growing resource base and convert more resources into reserves for our state-of-the-art processing facility.”
Mr Holland said the equity raising would be a significant step in the history of Mt Carlton as it transitions from being a non-core asset for former owner Evolution Mining (ASX: EVN), to the foundation asset of a focused, emerging producer.
Proceeds would be put towards infill and extensional drilling at known mineralisation around the Mt Carlton and Crush Creek projects, as well as regional exploration to add to planned production volumes.