Advent Gold closes a $1.3m round to fund exploration at its 20g/t New Zealand gold project
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Special Report: The junior explorer continues to make strides in developing its high-grade prospect in the mineral-rich Reefton area.
2019 has been a busy year so far, as Advent Gold puts the pieces in place to prove up a resource at the site using the latest exploration technologies.
In addition, CEO Adam McKay has just completed a $1.3m capital raise from a group of high-profile investors in Canada.
Speaking from Toronto, McKay said: “The seed round was set at $650,000 AUD, interest was immediate and the raise was oversubscribed, and we ended up taking $1.3m from a combination of high net-worth (HNWs), known gold investors and other investors,” McKay told Stockhead.
“Funds were committed within days of them receiving the presentation. They immediately saw the potential and understood the story.”
The funds raised will go towards exploration work in order to prove up a number of high priority high-grade targets at Reefton, McKay said. This includes depth extensions and drilling of offset lodes caused by thrusting.
The Reefton project sits on the West Coast of New Zealand’s South Island in the Reefton District – an area well known within mining investment circles for its exceptional gold grades.
Previous operations in the area produced around 800,000 ounces of gold from 26 separate mines at an average of around 20 grams per tonne. — a much higher grade of mineralisation compared to most new commercial discoveries in Australia.
Those levels are also higher than Bellevue Gold’s project north of Kalgoorlie, which has so captured the interest of local investors over the past 12 months.
Some mines on Advent Golds’s ground were even more prolific, producing at up to 60g/t – almost 2 ounces per tonne – a grade almost unheard of in Australia, except at the now world famous Fosterville mine in Victoria.
The bulk of that historic mining work was as a result of targeting quartz outcropping in the late 1800s and early 1900s.
The area has not been systematically explored in decades, so looking ahead, Advent Gold’s key strategy is to utilise modern exploration techniques to uncover more underground high-grade targets that were missed by the unsophisticated methods of the ‘old timers’.
“Its hard to believe that an area this rich in gold has been bypassed by modern exploration techniques but that is great news for our shareholders,” McKay said.
And Advent Gold wants to lead the way in developing processes that are both effective and good for the environment.
“It’s a key part of our story; embracing new technology to both reduce costs and suit the jurisdiction that we plan to be mining in,” McKay said.
The company is working with the CSIRO to test Reefton’s suitability for “in situ” recovery (ISR) method for future mining operations; an extraction process where environmentally friendly chemicals are pumped into the ore body to draw out the gold and bring it to the surface, without disrupting the local land vegetation.
ISR itself isn’t new, but it’s difficult to implement because it’s only effective for specific types of deposits.
“Scoping studies are already underway. The next step for us is to get ore samples over to the CSIRO to carry out their test work on,” McKay said.
“The signs are pointing to the ground being suitable because it’s a sandstone deposit, and that’s the most common host rock for ISR extraction around the world,” he added.
If proven, it could be a game changer for New Zealand and Advent Gold. However, there are also plenty of traditional processing options available – the company having already secured rights to private land sites amenable to installation of an appropriate plant and infrastructure if the BFS and ISR proves to be uneconomic or unsuitable.
Developing minimally invasive mining techniques is an important step in the New Zealand market, where the government maintain strict oversight of the sector on environmental grounds.
And as a result of some ongoing regulatory uncertainty, Advent Gold has extended the time frame for its IPO in Australia out to next year.
“It may be resolved within six months,” McKay said. “But whether it’s six or 12 months, the IPO is definitely still on the cards.
“With the majority of funding coming from Canada, we are also considering an TSX listing – the quality of investors, and those wanting more, we have in that particular jurisdiction is incredibly exciting and would warrant investigation of a TSX listing.”
However, McKay said the extended timeframe also offers a silver lining for Advent Gold.
“What it allows us is time to add more value to the project and get started on exploration more aggressively, utilising a funding boost which was larger than expected. So when we do IPO, the RGP won’t be an unproven exploration site anymore; Advent Gold will be an early stage development company with defined resources on it,” he said.
“We’ll also be in advanced stages of the CSIRO study work, and we’ll have plenty of additional brownfield and greenfield targets by then.”
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