Breaker Resources has agreed to a $8 million share placement to Electrum Group’s strategic opportunities fund to ramp up drilling at the Lake Roe gold project in Western Australia.
Electrum Group, a United States-based precious metals investment manager, will become Breaker’s largest shareholder following the placement.
The placement consists of over 23 million newly issued shares valued at 35 cents per share. Proceeds will fund reverse circulation (RC) and diamond drilling at Lake Roe’s Bombora resource in the Goldfields region.
Electrum is expected to own approximately 9.95 per cent of the issued Breaker shares once the placement closes. It will also have the right, subject to regulatory approval, to nominate a person with strong links to US capital markets to Breaker’s board.
“Breaker welcomes the support of a prominent North American institutional fund and their support is seen as an expression of confidence in the growth potential of the company’s Lake Roe gold project,” Breaker reported in an ASX statement.
“The placement follows a strategic review undertaken by Breaker aimed at unlocking the full value of the company’s Lake Roe gold project.
“As a result, the board has formed the view that the best way to deliver value to shareholders is to expand the resource base through further drilling.”
Breaker has now put the Lake Roe pre-feasibility study on hold after its decision to partner with Electrum, as the companies share the objective of advancing the project along the value chain through expansion of its existing resources.
RC and diamond drilling are scheduled to start at Lake Roe in the coming week.