Zenith Minerals to accelerate ‘Going for Gold’ strategy with $7.65m placement

• ZNC is raising $7.65 million via a strategic placement at 12.75c per share
• Funding to support extended drilling at consolidated Dulcie and Red Mountain gold projects
• Ida Metals buys in as cornerstone investor, committed to gold development trajectory

Special Report: Zenith Minerals has entered an agreement with Ida Metal Investments for a $7.65 million strategic placement at 12.75c per share to accelerate drilling on two of its gold projects.

A Perth-based investment company specialising in strategic investments across Australia’s gold sector, Ida Metal has bought in at a 15.9% premium to Zenith Mineral’s (ASX:ZNC) last closing price on September 23, securing a 10.18% stake in the company.

ZNC managing director Andrew Smith said the landmark $7.65m placement was a significant milestone in advancing its ‘Going for Gold’ strategy at the Dulcie gold project in WA and the Red Mountain project in Queensland.

“It renders the company exceptionally well-funded to continue resource growth at Dulcie beyond the current 300,000-ounce mineral resource and to really get after Red Mountain, which has huge optionality for Zenith shareholders,” he said.

“The strategic placement comes at a pivotal time for the company, enabling us to accelerate exploration efforts at Dulcie ahead of the already-planned 9,000-12,000m resource growth drilling campaign.

“In parallel, we will implement an expedited drilling campaign at Red Mountain, with the aim of completing the expanded program before year-end.”

Funding to accelerate project development

Zenith Minerals intends to invest $3 million from the placement into drilling at Red Mountain.

A drilling program of 10-15 reverse circulation holes will be undertaken at the project, following a recently completed campaign.

“The company also looks forward to receiving the final assays from our recently completed diamond drilling program at Red Mountain, which are expected to provide further insights into this highly prospective IGRS project,” Smith said.

Assays from that round of drilling are still pending, but Zenith expects to release them to market within the coming weeks.

The company says the RC drilling at Red Mountain will be followed by a round of diamond drilling and metallurgical test work to push the project into the next phase of evaluation.

A further $3 million will go to accelerate resource expansion drilling at the consolidated Dulcie gold project through a 9000–12,000 metre RC drilling program.

The company will use the data generated at Dulcie for early development assessments and to advance the project as a potential future mining opportunity.

The remaining funding will support ZNC’s working capital needs, the development of its exploration portfolio, and the costs of the placement itself.

This article was developed in collaboration with Zenith 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.