It looks like investors in Golden State Mining (ASX: GSM) weren’t too keen on the company’s recent efforts to raise some capital.

Last month, the junior gold miner announced an entitlement offer for unlisted options. Existing shareholders would be eligible to snap up the options on a pro-rata basis of 1 option for every 2 shares they owned.

In doing so, GSM hoped to raise about $90k. But the company told the market this morning that the scheme only raised $33,450. (It’s now at the sole discretion of the company’s directors as to how they choose to place the shortfall.)

The sound of crickets

Golden State’s market update comes amid a broader trend in the mining sector; the lack of equity capital flowing towards junior miners.

The trend is particularly evident even among junior gold miners such as GSM, and that’s despite gold prices (in AUD terms) consistently hovering near multi-year highs.

But rather than structuring its placement as a vehicle to fund any existing cash shortfall, GSM referred to this raising as a “loyalty option”.

In GSM’s prospectus, it said the primary purpose of the offer was to “recognise the invaluable support the Company has received from its shareholders and reward them for their loyalty”.

However, the company’s shareholder base wasn’t loyal enough to fulfil the allocation of call options, which cost 0.5 cents each and were exercisable at 25 cents with an expiry date of 8 November.

The 25 cents strike price is well above GSM’s current value of 9.1 cents per share — which were unchanged in morning trade — and above the issue price of 20 cents when the company listed in November.

Any funds raised would go towards the expenses incurred in making the offer and general working capital, GSM said. The deal wasn’t expected to affect the company’s financial position or capital structure.

GSM continues to conduct exploration activities at its Cue gold project.

In other ASX gold news today

Shares in Vango Mining (ASX: VAN) were up four per cent to 13 cents, after the company announced further drilling plans following the discovery of high-grade gold intersections at its Trident project in WA. Vango says the Trident gold corridor now extends to 2km, and it wants to drill deeper after shallow testing revealed high-grade gold deposits of up to 24.2 grams per tonne.
Minnow explorer Stone Resources (ASX: SHK) has completed a round of due diligence drilling at its Ben Hur project in Laverton, Victoria. The company said it revealed mineralised deposits of between 5.35 and 12.8 g/t. Shares in SHK were unchanged at 0.2 cents.
Anglo-Australian Resources (ASX: AAR) advised the market that it’s now commenced a reverse circulation drilling campaign at its Mandilla Project in WA. The drilling is targeted at Mandilla South, identified as an enriched gold zone 2.5km in length with a depth of 30-50 metres.
And Maximus Resources (ASX: MXR) presented its quarterly results update this morning. “Invoiced revenue for the March quarter exceeded $1.1 million, a 200 per cent increase compared to $544,000 in the previous 6 months,” MXR said. The company attributed its poor 2H 2018 numbers to timing issues around the accounting treatment for revenue and expense items. Shares in Maximus were unchanged at 6.7 cents.