Medallion is looking to raise $5.2m through a fully-underwritten non-renounceable entitlement issue to support aggressive exploration across its projects.
This exploration push will be focused primarily on its Ravensthorpe gold project that remains open in all directions, which presents the company with a fantastic opportunity to increase the existing resource of 16.5Mt grading 2.6 grams per tonne on a gold equivalent basis for 1.37Moz.
The recent resource update was based on 26,000m of drilling at the Kundip Mining Centre and there is another 20,000m that has been completed and will inform further updates, Medallion Metals (ASX:MM8) clearly believes that its work is not done.
As such the company expects to resume drilling in early September and provide a further update to resources in November.
“Undertaking this capital raising is critically important to expanding Medallion’s growth ambitions,” managing director Paul Bennett said.
“We are now in a strong position to mobilise drills back to Ravensthorpe with the strategic objective to continue growing the resource and test the multiple regional discovery opportunities to understand the true potential of the field.
“We have a substantial growing resource base and target portfolio and look forward to continuing to advance this outstanding project.”
Feeling entitled
The pro-rata entitlement issue of one share priced at 16c for every six shares held at the record date is fully underwritten by Canaccord Genuity.
This represents a 13% discount to the last traded price of 18.5c and a 22% discount on the 30-day volume weighted average price of 21c.
Proceeds will be used for resource extension drilling at the KMC of Ravensthorpe, regional exploration and working capital.
Ravensthorpe gold project
The project is centred around the historical KMC which is midway between the regional centres of Ravensthorpe and Hopetoun.
It benefits from excellent infrastructure and is easily accessed by sealed roads with a sealed airstrip located 10km to the south of the project.
The KMC consists of numerous mineralised structures which have sustained varying levels of exploration and mining activity over their history.
About 67% of Medallion’s current resource estimate is in the Indicated category, which offers enough certainty for mine planning.
This article was developed in collaboration with Medallion Metals, 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.