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Gold miner Alkane Resources has made a $3.7m “strategic” investment at a premium in Pilbara-focused gold explorer Calidus Resources.

The cash injection from Alkane (ASX:ALK) means Calidus (ASX:CAI) is now fully funded to complete the pre-feasibility study (PFS) on its Warrawoona project in the East Pilbara in Western Australia, boss Dave Reeves told investors this morning.

The news was well received with shares jumping over 15 per cent to an intra-day peak of 3c.

Alkane’s shares were also up, gaining 4.5 per cent to an intra-day high of 23c.

Alkane, which is also advancing a rare earths project in New South Wales towards production, has agreed to subscribe for 125 million shares at 2.95c each — a 13.5 per cent premium to Calidus’ closing share price on Tuesday.

The company has more than enough cash and bullion — $80m at the end of June — to be looking for investment opportunities.

Alkane will own an 8.8 per cent stake in Calidus. The company will also receive 70 million options that can be converted to shares at a cost of 3.5c each before November 1, 2019.

Exercise of the options will boost Alkane’s stake to 10 per cent.

“Working collaboratively alongside the existing Calidus board and management team, Alkane brings additional capital and operating capability that will bolster the Warrawoona gold project as it moves through the critical feasibility phases in 2019,” Alkane managing director Nic Earner said.

Calidus expects to start work on the PFS once it has all the results back from the current drill program, which has four to six weeks to run, and it has released a resource upgrade.

The Warrawoona project has a current gold resource of 712,000 ounces at 2.11 grams per tonne.

In a former life, Calidus was failed Perth-based drug company Pharmanet Group.

In June last year, gold miner Keras Resources sold a subsidiary into the shell of Pharmanet, which had been in receivership since 2015, and renamed the company Calidus.