VTX raises $2.1m to purchase mining equipment for near-term producing Reward gold mine

Firm commitments have been received for a strategic placement to an existing Vertex investor to raise $1.1m
Placement proceeds will be further augmented by loan funding of $0.98m, under a convertible facility agreed with institutional / sophisticated investors
Proceeds intended to be applied towards the acquisition of mining equipment

Special Report: Vertex Minerals has raised $2.1m following firm commitments for a placement and convertible loan, allowing the company to purchase mining equipment for the Reward gold mine.

Vertex Minerals (ASX:VTX) is on track with plant refurbishment and preparations to move the Reward mine, in NSW’s central west, through to the production phase by 2025.

Reward is considered one of Australia’s highest grade gold deposits with 419,000t grading 16.72g/t gold – or 225,200oz of contained gold – with a higher confidence indicated resource of 141,000t at 15.54g/t, or 70,500oz of contained gold.

VTX thinks ore sorting technology will improve both the sustainability and profitability of mining operations at Reward, where previous testing of low grade stockpiles had demonstrated an excellent response to ore sorting with 79% mass reduction achieved with a corresponding gold recovery of 94%.

Contractor Gekko has incorporated ore sorting into the Reward flow sheet and plant design that is being refurbished/built at their Ballarat factory by designing and manufacturing simple conveyances to and from the proposed ore sorting unit with the ore unit comprising a separate module to the crushing and gravity recovery circuit.

Placement details

Firm commitments have been received for a placement and convertible loan financing to raise up to $2.1M at $0.16 per share before costs, allowing VTX to purchase an ore sorter and associated conveyance equipment, alongside an underground drill rig.

The placement will comprise the issue of up to 6,900,000 new fully paid ordinary shares at an issue price of $0.16 per share.

Subject to shareholder approval, the placement participant will also receive three free attaching options for every five shares.

“Supportive existing shareholders”

“We are very pleased to have the support of a strategic investor in this placement along with some of our very supportive existing shareholders backing the convertible loan,” VTX executive chairman Roger Jackson said.

“The funds will be used to acquire a laser ore sorter which will be integrated into the Gekko gravity gold plant along with an underground drill rig.

“The drill will be focussed on the high-grade targets below and along strike of the high-grade gold resource at Reward as we wish to build our gold inventory from within our Reward mine.”

Loan funds

Loan funds are expected to amount to $976,000 and VTX intends to seek approval for conversion of the loan at the company’s 2024 AGM to be held on 29 November 2024.

Subject to shareholder approval, loan funds will be converted to fully paid ordinary shares at an issue price of $0.16 per share with two free attaching VTXOA options for every five shares issued on conversion.

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.