• Toubani Resources has received firm commitments from new and existing investors for a $10m placement
  • One of Paradice Investment Management’s funds has committed to subscribing for enough shares for a 9.9% stake in the company
  • Company directors Matt Wilcox, Scott Perry and Phil Russo have also subscribed for shares subject to shareholder approval

 

Special Report: Investors have demonstrated their confidence in Toubani Resources and its Kobada gold project by committing to a $10m placement.

The company has received firm commitments from several Australian specialist resources fund managers as well as existing and new institutional and retail investors to subscribe for ~58.8 million new shares priced at 17c each under a two-tranche placement.

Notably, one of the funds of Australian fund manager Paradice Investment Management has committed to subscribing for new shares in the placement that will result in it holding a 9.9% stake in Toubani Resources (ASX:TRE) on completion of the offer.

Company directors Matt Wilcox, Scott Perry and Phil Russo have also subscribed for shares subject to shareholder approval.

“We are humbled by the support received from existing and new shareholders as we welcome several new high-quality institutions to Toubani,” managing director Phil Russo said.

“We are well positioned to advance our compelling West African gold development project and look forward to delivering an updated feasibility study for Kobada in the coming months.

“Toubani’s dual-track strategy of advancing Kobada to shovel-ready status while pursuing resource growth opportunities offers an exciting future for the company and our shareholders.”

 

Use of funds

Proceeds from the placement will be used to complete the definitive feasibility study which is expected to define the Kobada project in southern Mali as one of the largest oxide gold development projects in West Africa.

Funds will also be allocated to post-DFS activities such as finalising outstanding in-country agreements, updating permitting as well as advancing environmental and social activities aimed at bringing the project towards shovel-ready status.

Additionally, TRE will pursue resource growth opportunities by carrying out reverse circulation drilling of high-priority satellite targets to define additional oxide material and diamond drilling to test the depth potential below the Kobada deposit as the average drilled depth to date is only ~110m.

Other work will include post-DFS optimisation studies for the project, which currently has a 2.2Moz resource, of which 2Moz is in the higher confidence indicated category that provides enough certainty for mine planning.

More importantly, about 1.4Moz of the indicated resource is in the oxide zone, which contains material that is typically cheaper, easier and less energy intensive to process than fresh rock given it is free-dig, near surface material.

 

Placement details

The $10m placement will see shares issued in two tranches.

Tranche 1 will raise about $7.2m through the issue of ~42.2 million shares under the company’s available placement capacity under ASX Listing Rules 7.1 and 7.1A.

Shareholder approval will then be sought at an upcoming general meeting in October for the second tranche of ~16.6 million shares to raise the remaining $2.8m.

The offer price of 17c represents a 10.1% discount to the 10-day volume weighted average price and a 5.6% discount to the last traded price of 18c.

 

 

This article was developed in collaboration with Toubani 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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