Gold developer Calidus Resources has completed a strategic placement to ASX listed gold miner Alkane Resources this week, raising approximately $3.7m via an issue of 125 million shares at 2.95c per share.
The company will also issue Alkane with 70 million free-attaching unquoted options, exercisable at a strike price of 3.5c each, on or before 1 November 2019.
According to Calidus, proceeds of the capital raising will complement the company’s existing cash position and provide sufficient funding to complete the upcoming mineral resource update and PFS for the flagship Warrawoona gold project in the Pilbara region of WA.
The company has effectively formed a technical alliance with Alkane with this placement and will leverage the latter company’s operational experience and cost base platform to assist it for the upcoming PFS studies.
Alkane operates the Tomingley gold mine in central western NSW that churned out just over 78,000 ounces of gold last year.
The cashed-up company has just approved the development of an underground mine at Tomingley and is embarking on its own aggressive exploration program around the mine, to expand resources in the region.
Alkane is also developing its Dubbo project in NSW, which is an unusual felsic intrusive rich in zirconium, hafnium, tantalum, niobium, yttrium and other rare earth element mineralisation.
Calidus Managing Director Dave Reeves said: “This strategic placement to Alkane means that Calidus is now fully funded through the upcoming pre-feasibility study and as we continue to advance exploration at Warrawoona.”
“We welcome Alkane on to the register, not just as a shareholder but as an operating gold producer with a wealth of knowledge and skills that is now available to Calidus under a technical alliance.”
“A pre-feasibility study is expected to commence on completion of the resource upgrade that is anticipated to occur when all results are received from the current drill programme that has 4 to 6 weeks to run."
At the completion of the placement, Calidus will have about 1,419 million shares on issue and Alkane will hold approximately 8.81% of the company’s issued securities or 6.65% of the fully diluted capital of Calidus – excluding the exercise of Alkane’s option allocation.
If Alkane were to exercise all 70 million options, it would then hold 10% of the fully diluted capital structure of Calidus.
Alkane Managing Director Nic Earner said: "The Calidus investment represents an exciting opportunity for Alkane shareholders. Working collaboratively alongside the existing Calidus board and management team, Alkane brings additional capital and operating capability that will bolster the Warrawoona gold project as it moves through the critical feasibility phases in 2019."
The Warrawoona gold project has a current mineral resource of 10.5 million tonnes grading 2.11g/t gold for 712,000 ounces of gold, with Calidus aiming to bank a 1 million ounce resource near year’s end to underwrite its upcoming PFS.
By Matt Birney
