Laneway completes first stage of $7.4m cap raising, advances proposed gold plant acquisition
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Laneway Resources has completed the first stage of a $7.4m capital raising as it progresses negotiations to acquire a gold processing plant for its Agate Creek mine in Queensland that would give it a major leg up.
Laneway Resources (ASX:LNY) has so far raised $1.9m following the completion of an initial share placement to sophisticated and professional investors.
This will be supported by a proposed entitlement offer to raise $4.5m and a second placement to raise $1m.
The cash raised from the initial placement will be used to cover near-term exploration program expenditure, including the current drilling program at Agate Creek following up targets from the recently completed multi-element regional study, as well as expenditure on current mining activities and part repayment of short-term borrowings.
The 12-month study undertaken at the Agate Creek project – with input from some of the best independent geological experts in the country – indicated strong similarities to an intrusion-related gold system (IRGS).
These systems host major gold mines like the former producing Kidston mine, also in North Queensland, which was once Australia’s largest open cut gold mine averaging production of 200,000-300,000oz each year.
Drilling by Laneway at Agate Creek late last year returned near-surface, high-grade gold hits from the first two holes of the 49-hole, 2,774m drilling program.
Top intercepts included 1m at 9.68 grams per tonne (g/t) gold from just 12m and 14m at 5.84g/t from 36m, including 1m at 33.9g/t from 45m and 1m at 18.7g/t from 40m.
Overall, the results so far have confirmed extensions of the previously mined veins, along with formerly identified deeper and almost parallel systems which also host narrow high-grade gold zones.
Meanwhile, Laneway is continuing talks to acquire a processing plant and the associated tenements, which would give the company an immediate processing option for the high-grade Agate Creek ore.
The major advantage of the acquisition for Laneway would be the big boost to its cashflow and significantly lower costs because it substantially cuts the distance to transport by 700km under previous toll processing arrangements.
A successful deal would provide multiple processing growth options to underpin a longer-term production growth profile for the company.
This article was developed in collaboration with Laneway 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.