Ausgold Ltd has received binding commitments from institutional and sophisticated investors for a share placement to raise A$6.35 million to fund an extensive exploration and resource expansion drill program at its Katanning Gold Project in Western Australia.
There was strong demand for the placement from a number of international investors, including a A$3 million cornerstone investment from the Canadian resource investment group Dundee Goodman Merchant Partners.
The new shares to be issued under the placement are priced at A$0.0327, which represents a 10 per cent discount to the volume weighted average price over the last five days of trading prior to the company’s trading halt on 3 August 2020.
Ausgold’s Managing Director Matthew Greentree said: “We are pleased to welcome our new investors, including Dundee Goodman Merchant Partners (DGMP), as significant shareholders in Ausgold. Following the completion of a thorough due-diligence process, DGMP share our view of the significant potential of the KGP. The funds raised in this placement will be used to accelerate drill programs at the KGP, which are expected to add further high-grade Resource ounces and to advance high priority targets within the Company’s significant tenement position.”
Mr Greentree continued, “The Mineral Resource at the KGP is currently 1.2 million ounces with clear extensions to mineralisation as demonstrated by the recent round of high-grade drill results which should add to the current gold Resource at Katanning and further improve the project economics. Further drilling is planned to target high-grade mineralisation down dip and north along strike where it remains open.”
“With this new funding Ausgold will be expanding its current drill programs and we look forward to updating the market with further exploration success,” he concluded.