Zenith Minerals has continued a stellar run after investors flooded its capital raising to leave this gold explorer cashed up to turbocharge its exploration efforts in Queensland and WA.
The Perth-based explorer (ASX: ZNC) had intended to raise about $3 million but was overwhelmed by investors wanting to support its journey.
With the support of lead manager Canaccord Genuity, Zenith closed off a heavily oversubscribed raising with commitments from investors in Australia and Europe for $5.1 million.
The raising was priced at 10¢ a share, a 13.8% discount to the 15-day volume weighted average price of 11.4¢.
The raising was finalised on Tuesday, with Zenith’s shares returning to trade to close yesterday at a week-end of 11.5¢.
The larger-than-expected raising makes Zenith the latest company to rejoice at strong investor support for its exploration strategy, a factor also recognised in the company’s 275% share price rise in the June quarter.
Zenith joins White Rock Minerals (ASX: WRM), St George Mining (ASX: SGQ) and Core Lithium (ASX: CXO) in exceeding their capital raising targets.
Zenith managing director Mick Clifford told Investor Insight the raising was the result of the company’s “clear focus” on high-impact exploration plans for its 100% owned Australian gold assets.
“[Zenith’s] recent success from our maiden drill program at the Red Mountain gold project in Queensland, along with a very solid macro picture for gold exposure and recent exploration successes from our peers is driving excitement in Zenith,” he said.
“On the back of the very successful capital raising we are now looking at how we may be able to accelerate exploration activity across our projects.”
The company expects a steady stream of newsflow over the coming weeks from its ongoing drilling at the Red Mountain gold project and a second drill program at the Split Rocks gold project south of Southern Cross in WA, which will test a series of previously identified high-order targets.
As a part of Zenith’s “clear focus”, the company last week struck a deal to sell its Fraser Range nickel tenement in WA for $100,000 to New Energy Metals, conditional on the purchaser succeeding with its ASX listing plans.
Perth silica sands project developer VRX Silica (ASX: VRX) also attracted New Energy Metals’ interest, last week entering into a conditional agreement for the sale of its Biranup nickel and gold project in the Fraser-Albany Oregon to the IPO hopeful in exchange for stock and cash. VRX’s sale of Biranup is in line with the company’s strategy to focus on achieving production at its Muchea silica sands project by 2021.
Since raising an eye-popping $7.35 million in May, White Rock has wasted no time getting drill rigs on site at its 100%-owned Last Chance gold prospect in the Tintara belt of central Alaska. The company has planned a initial 2000m diamond hole program, with drilling expected to begin early next month.
White Rock’s share price has continued to soar, up 18.2% for the week to a fresh two-year high of 1.2¢ – and four times the 0.3¢ raising price six weeks ago.
Meanwhile on the merger and acquisition front, Ghana project developer Cardinal Resources (ASX: CDV) has issued 26 million shares at 60¢ each to preferred takeover suitor Shandong Gold to raise $11.9 million.
Cardinal and Shandong are continuing to work on finalising the Chinese suitor’s $300 million cash offer to acquire Cardinal. Cardinal owns the world-scale Namdini gold project in Ghana, which has a proven and probable ore reserve of 5.1 million ounces to underpin a sizeable mine life once development gets underway. Cardinal closed the week at 59¢, just below Shandong’s conditional 60¢ offer price.
Shandong’s largest exposure in Australia is its 49.5% stake in WA gold explorer Focus Minerals (ASX: FML).
Focus joined the soaring gold stocks this week, jumping 15% to 26.5¢ on the back of news of an 81% increase to the mineral resource of its Greenfields deposit near Coolgardie. A revaluation of the geological model at Greenfields resulted in the new resource increasing to 2.66Mt at 1.62 g/t for 139,123oz with suggestions of more to come.
Importantly for investors, Focus also announced it was updating a two-year prefeasibility study into resuming mining at its Coolgardie project, factoring in greater mineral resources (including Greenfields) and the higher prevailing gold price.
The price across Focus’ Coolgardie project is the Three Mile Hill processing plant, which is on care and maintenance but likely to be sought after by third parties in the area looking for tolling solutions for their ore.
The renewed interest on Coolgardie is in parallel to Focus’ push to complete a PFS on its 100%-owned Laverton project by the end of the year.
Communicating your story to all stakeholders, including shareholders and prospective investors, is key. To discuss your strategic communications needs, contact Cannings Purple’s Director of Investor Relations Peter Klinger.