Alkane Resources is set to become the largest shareholder in junior gold company Genesis Minerals, after announcing a $6 million investment in the company.
The investment comes as Alkane continues to grow its gold business, both organically through its Tomingley gold operations in New South Wales and with investment in junior Australian gold companies.
This comes as Genesis aims to raise up to $7.5 million to fast track the next phase of resource and exploration drilling at its Ulysses gold project in Western Australia.
“Alkane has maintained a small stake in Genesis since 2018, and we have followed the recent progress of its flagship Ulysses gold project in particular,” Alkane’s managing director Nic Earner said.
“We welcome the opportunity to expand our investment to become a supportive strategic shareholder.”
The Ulysses gold project is close to existing infrastructure 30 kilometres south of Leonora and has mineral resources of 7.1 million tonnes at 3.3 grams per tonne for 760,000 ounces of contained gold.
The proceeds of the Genesis’ capital raising will allow it to progress a multi-prolonged exploration and development strategy at Ulysses, including resources in-fill work, resource extension drilling and ongoing feasibility study work.
It also allows the company to pursue other strategic acquisition and growth opportunities in the Leonora region.
The $7.5 million will be raised at a price of 3.2 cent per share through an initial placement by Alkane up to Genesis’ placement capacity to raise $1.4 million.
A one-for-six issue to raise up to $6.05 million partially underwritten by a placement of up to $4.6 million by Alkane will also form part of this.
A second-tranche conditional placement to top-up Alkane’s shareholding in Genesis up to 15 per cent may raise funds additional to the $7.5 million.