Special Report: Investors are backing a $24.5m capital raising that Wiluna is undertaking to fund drilling and underground work to underpin Stage 2 development of its mine.

International and domestic institutional and professional investors have already made firm commitments for a $22.55m placement priced at $1.43 per share, a 8.34 per cent discount to the 10-day volume weighted average price.

Existing Wiluna Mining (ASX:WMX) shareholders will also be given the opportunity to purchase shares under the same terms to raise up to a further $2m.

Proceeds from the capital raising will be used to accelerate drilling to expand its reserves and resources.

It will also increase the rate and quantum of the company’s underground mine development for the sulphide development program, feasibility work associated with Stage 2 expansion to 250,000 ounces of annual gold production.

Wiluna mine expansion

The company has been progressing its Stage 1 and Stage 2 sulphide expansions plans, the first of which is envisioned as a low-cost pathway towards increasing gold production to around 120,000oz per annum from October 2021.

The second will see production increase to +250,000oz per annum and is proposed to start in late 2023 or early 2024.

Last month, the company cranked up resources at the Wiluna Mining Centre to 4.24 million ounces grading 4.89 grams per tonne (g/t) thanks to successful drilling.

Overall resources across its ground has also increased to an 8.04 million-ounce gold resource at 1.63 g/t.

Ongoing work has also successfully reduced the cost of operations while increasing production.

In the September quarter, gold production increased by 18 per cent to 13,360z while all-in sustaining costs (AISC) was down 38 per cent to $2012 per oz.

Wiluna had flagged that AISC is expected to continue dropping in the current quarter in step with further production improvements.

Ongoing production of about 5,000oz of gold per month should provide consistent cash flow of about $4m per month for the remainder of the financial year.

The company controls over 1,600sqkm of the highly fertile Yilgarn Craton in the Northern Goldfields of WA.

This article was developed in collaboration with Wiluna Mining, 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.