PERTH (miningweekly.com) – Junior gold miner Kidman Resources would raise up to A$6.5-million through a share placement and rights issue to increase gold production at its Burbanks project and to complete the purchase of the Mt Holland goldfield.
Kidman said on Friday that the company would raise an initial A$3-million through a share placement to institutional and sophisticated investors, with the shares priced at 8.5c each.
A further A$3.5-million would be raised through a one-for-three rights issue, which would also be priced at 8.5c each.
The offer price represented a 19.5% discount to the company’s 15-day volume weighted average price.
The raising would enable Kidman to finalise the A$3.5-million acquisition of the Mt Holland project, in Western Australia, which had a combined measured, indicated and inferred mineral resource of 928 000 oz. Mt Holland hosted the flagship Blue Vein deposit, which had a resource of 372 000 oz, at 2.30 g/t gold.
Kidman was hoping that an extensive drilling campaign at Mt Holland would grow the high-grade resource, allowing the company to update an existing prefeasibility study focusing on the Blue Vein deposit, which found that the project could produce about 43 000 oz/y over an initial three-year period.
Meanwhile, funding would also be used to lift production at the Burkbanks operation, also in Western Australia, by some 50% to 30 000 oz/y, and to grow the existing 99 000 oz mineral resource to underpin a multiyear mine life.
The Burbanks project poured its first gold in September last year.
Kidman told shareholders on Friday that the two-pronged strategy at Burbanks and Mt Holland was aimed at enabling the company to achieve its goal of becoming a midtier gold producer.
Edited by: Mariaan Webb
Creamer Media Senior Deputy Editor Online
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