Vertex Minerals raising $11m to advance underground gold development at Hill End

• Vertex Minerals raising $11m to accelerate underground development at its Hill End gold project
• Capital raising provides remaining funds to take the project to underground mining in July 2025
• Gold production expected to come at an AISC of less than $2000/oz, providing strong margins

Special Report: Vertex Minerals has received firm commitments from existing and new institutional investors for an $11m capital raising to accelerate underground development at its advanced Hill End gold project in NSW.

The capital raising consists of a conditional placement of shares at 21c each to raise $7.5m – including a $4m cornerstone investment – and a convertible loan to raise the remaining $3.5m that has a 10% annual interest rate.

Additionally, Vertex Minerals (ASX:VTX) will seek to raise a further $1m through a share purchase plan.

Participants in the capital raising will receive one free attaching option exercisable at 25c and expiring on July 17, 2026 for every three shares subscribed for.

Proceeds from the capital raising allow the company to accelerate underground development at the high-grade project in the historical Hill End gold field within the highly prospective Eastern Lachlan Fold Belt and begin underground mining by July 2025.

Hill End has a resource of 419,000t grading 16.7g/t gold for 225,200oz of contained gold.

Encouragingly, a pre-feasibility study completed in February 2024 had envisioned the production of 30,000oz of gold at an all-in-sustaining cost of less than $2000/oz.

This bodes well for the project’s ability to deliver strong returns given the current price of gold in Australia sits close to $5100/oz mark.

Listen: Roger Jackson joins Barry FitzGerald on the Explorers Podcast

Closing in on production

Executive chairman Roger Jackson said the past few months had seen the successful installation and commissioning of the Tomra ore sorter and gravity gold plant at the Hill End project site.

“With the processing circuit already operating on historical stockpiles, it’s now only months before we commence underground mining,” he added.

“The team at Hill End is excited at the prospect of mining one of Australia’s highest grade gold mines, with our resource at a very high 16.7g/t Au in situ.

“The Tomra ore sorter is very effective at separating our quartz-hosted gold ore from other rocks.

“It’s a compact, but critically fully approved, site. And given our high-grade resource and the adoption of mechanised underground mining as well as the Tomra ore sorting technology, we are targeting production of gold for less than A$2,000/oz.

“Finally, we believe Hill End will have one of the best ESG footprints of an Australian gold mine on account of our minimal grind requirements, low water usage, gravity plant with no chemicals or cyanide and the resultant production of benign tails.”

Jackson noted the capital raising provided the remaining funds to take the project to underground mining in July.

“With over $25m spent by previous owners on underground development and the ore sorter and processing plant in place and operating successfully, we believe Vertex is on the cusp of a period of significant cash generation from our uniquely high-grade gold operation.”

This article was developed in collaboration with Vertex Minerals, 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.