- Magnetic Resources has raised $12m via a very oversubscribed, single-tranche placement
- The company received strong support from both domestic and international investors
- Funding will assist with deeper exploration drilling as well as ongoing feasibility work
Special Report: On the back of releasing some very impressive economics for its flagship asset, aspiring gold producer Magnetic Resources has raised $12 million to take its Lady Julie project to the next phase of development.
Magnetic Resources (ASX:MAU) received commitments from several high-quality new and existing investors, including multiple specialist resource funds, for the placement which comprised 13.3 million fully paid ordinary shares at 90c per share.
The placement was increased due to significant demand from both domestic and international professional, sophisticated and institutional investors. It was undertaken at a 10.9% discount to the company’s closing price on 12 March ($1.01 per share) and a 15.6% discount to the 5-day VWAP ($1.07 per share).
MAU plans to use the funds to progress commercialisation works at Lady Julie, near Laverton in WA, where a recent PFS outlined a low-cost, high-margin gold production of 720,000oz over a nine-year mine life.
The PFS, released earlier this month, also highlighted a pre-tax IRR and NPV – both measures of profitability – of 85% and $547 million respectively.
Development capital sits at a manageable $93.4 million – including a 15% contingency provision for the plant cost estimate – for a standalone 1.8Mtpa processing plant and three months of pre-production activities, with payback estimated at 15 months.
Funds to assist with resource expansion
MAU managing director George Sakalidis says it is an exciting time in the journey of the company.
“Lady Julie project is shaping up as a financially robust project with potential to further expand the current known resources,” he says.
“Our recently released prefeasibility study shows the ability to generate a nine-year mine life and the funds from this raising will allow us to continue this work towards production as well as resource expansion work with the aim for a longer mine life.”
MAU also plans to aggressively drill test depths below 300m to 500m for potential resource expansion of the Lady Julie deposit, exploration drilling along the Chatterbox Shear and ongoing feasibility work, as well as general working capital.
This article was developed in collaboration with Magnetic 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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