Variscan nabs new cornerstone investor in $1.85 million capital raising

Variscan has attracted strong support from existing shareholders after raising $1.85 million in a capital raising, putting the company on a path to further prove up and expand resources at the San Jose Mine zinc mine in Spain.

In a further boost, Variscan (ASX:VAR) has also won the support of natural resources-focused investor Zinc GroupCo after subscribing for A$1.3 million and potential total funding of A$2.3 million if attaching options are subsequently exercised.

According to VAR managing director and CEO Stewart Dickson, ZincCo has experience in investing and supporting companies that are pursuing drill ready, highly qualified zinc explorations assets and near-term production opportunities.

“The San Jose Mine and wider Novales-Udias Project clearly fits ZincCo’s focus areas,” he says.

“Variscan has always sought to attract ‘value add’ capital to its share register, and ZincCo brings a capability in commodities trading and development that will assist us as we advance key workstreams to consider our mine restart options in due course.”

The company will use the funds to accelerate exploration and the evaluation of future production potential at the San Jose Mine.

Variscan is progressing towards publishing a maiden JORC-compliant mineral resource estimate and report on a Mine Restart Concept Study for the San Jose Mine during 2023.

Subscription by ZincCo

ZincCo has subscribed for 72,222,222 new, fully paid ordinary shares in Variscan at a subscription price of $0.018 per share, raising A$1.3 million.

The subscription will be in two tranches with the first tranche expected to settle on March 20 and second tranche, subject to shareholder approvals at a general meeting, on or around April 30.

Under the terms of the subscription agreement, the subscription shares will have one attaching option for every two subscription shares issued.

Existing key shareholder support

In addition, Variscan has also secured a further $0.55 million from a number of existing key supportive shareholders through the issue of 30,555,556 new fully paid ordinary shares.

The issuance of these further shares will also be in two tranches, with one attaching option for every two placement shares issued.

This article was developed in collaboration with Variscan Mines (ASX:VAR), 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.