Gold explorer Spartan Resources has received firm commitments to raise $25 million through an institutional placement.
The placement consists of the issue of about 62.5 million new Spartan shares, which represents about seven per cent of Spartan’s existing shares on issue.
The placement was conducted at an offer price of $0.40 per share that represents a premium of three per cent to the last closing price of $0.39 per share prior to the placement.
“We are very pleased with the level of support shown by well-credentialed resource investors for the placement, with the strong demand received, representing a clear endorsement of Spartan’s high-grade growth strategy,” Spartan Resources managing director and chief executive officer Simon Lawson said.
The company said it is well-funded with a pro-forma cash position of $53.2 million on completion of the placement.
$40 million of the placement’s proceeds combined with Spartan’s existing cash balance as of September 30 2023 is intended to be used for exploration, studies and care and maintenance costs, while $12m will be allocated towards corporate costs and general working capital. $1.2m will be used towards transaction and other costs.
“The proceeds of this placement, combined with existing cash reserves, will put Spartan in an outstanding position to capitalise on what has been an exceptional year for the company in 2023 and significantly upscale our exploration and resource drilling efforts in the first half of 2024,” Lawson said.
“The funds raised will be earmarked to delivering resource growth above the scheduled mineral resource estimate update in December 2023, targeting the next leg of resource growth at Dalgaranga and ensuring we can maintain our current exploration momentum.
“The Spartan team is committed to ensuring a thorough and detailed approach is taken to the delineation of the Never Never orebody and the surrounding targets. Spartan is focused on expanding the Never Never footprint with the most recent results hitting broad mineralisation more than 500 metres from surface.
“The Spartan Board has approved a significant increase in our exploration activities on site with the placement designed to ensure Spartan’s balance sheet strength and flexibility is maintained while funds are committed to advancing the Dalgaranga gold project.”
The new shares are expected to be issued on November 24 2023.
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