Alkane Resources plans to fund future exploration at its highly prospective East Lachlan gold assets in New South Wales with a $54.8 million capital raising.
The funds will be used to accelerate resource drilling across the Tomingley corridor, including step-out drilling at the Boda prospect and exploring other porphyry targets across the North Molong porphyry project.
Alkane is expecting approvals no later than January 2020 to develop an underground exploration decline that would drive underground from the Wyoming One mine to its Roswell and San Antonio prospects.
The company is also looking to purchase another section of land within the Tomingley corridor to support the underground decline.
“The continued exploration at Boda, where step-out drilling is underway, has considerable potential to create value for Alkane shareholders,” Alkane managing director Nic Earner said.
“Alkane’s 2020 program aims not only to assess Boda and surrounding mineralisation, but also to test other Boda-style targets across our licences.”
A promising discovery, the Boda prospect has been compared with Newcrest Mining’s Cadia Valley mine, with drilling in September returning high-grade results.
Alkane’s raising, at 55 cents/share, includes an institutional placement of new ordinary shares to raise $20 million and a one-for-eight non-renounceable rights issue to raise up to a further $34.8 million.
The majority of new shares to be issued are scheduled to settle on December 4, with substantial holder Abbotsleigh agreeing to subscribe for approximately $4.73 million.