Professional and sophisticated investors back GSR’s $1.7 placement as the Company targets high-grade extensions beneath historic mine workings at the Burbanks gold project.

For the past 18 months Greenstone Resources’ (ASX:GSR) exploration strategy at Burbanks has been focused on near surface additions to provide the critical mass required for the future resumption of operations.

But despite historical underground production exceeding 324,000oz @ 22.7g/t gold, high-grade extensions beneath the historic mine workings remain underexplored.

After raising $1.7m in a placement to investors, and a share purchase plan (SPP) on the cards for an additional $0.25m, GSR hopes to test these extensions at depth in Phase 2 drilling already underway at Burbanks.

With only ~30% of the mineralised horizon above 500m tested to date, GSR MD and CEO Chris Hansen says there is significant potential for future growth.

Funds will also be used to complete a scoping study for the Mt Thirsty nickel-cobalt-manganese-scandium project northwest of Newman, Western Australia – a 50/50 joint venture with Conico (ASX:CNJ).

Value yet to be realised

“The longer-term strategic significance of Burbanks cannot be understated, there are only seven ASX listed high-grade pre production gold projects in Australia,” Hansen explains.

“And Burbanks is the only project located within the epicentre of the Australian gold mining industry.

“The placement demonstrates the support we continue to generate in the market and the latent value within our portfolio of assets which is yet to be realised, including Mt Thirsty.”

Placement details

The placement shares will, upon their issue, rank equally with existing fully paid ordinary shares in Greenstone.

GSR expects to issue the Tranche 1 Placement Shares under the placement on or around 28 July.

The issue price of $0.013 per placement share represents a 18.8% discount to the last closing price of $0.016 on 19 July, a 24.5% discount to the 5-day volume weighted average price (VWAP) of shares, and a 23.1% discount to the 15-day VWAP of shares.

Share purchase plan

GSR also plans to offer a SPP to existing eligible shareholders with a registered address in Australia or New Zealand recorded on the company’s share register at 5.00pm (AWST) on 21 July.

Eligible shareholders will have the opportunity to apply for up to $30,000 worth of new shares at an issue price of $0.013 per SPP share, and one free attaching option for every two SPP shares issued under the SPP, on the same terms as the placement options.

The explorer hopes to raise a total of $250,000 but reserves the right to accept oversubscriptions up to $500,000 or scale back applications.

 

 

 

This article was developed in collaboration with Greenstone Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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