Nickel sulphide explorer Adavale Resources (ASX:ADD) is tapping investors for $4.47 million through an expanded placement and entitlement offer to support a drilling program at its Kabanga Jirani Nickel Project in Tanzania.
The $12.55 million market capitalisation company initially planned to raise $1.65 million through the placement but on Friday 21 July it said it had received further binding commitments to raise an additional $820,000, taking the total amount to be raised under the placement to $2.47 million.
Under the placement, Adavale will issue 130 million new shares at $0.019 per share, along with a 1-for-1 attaching listed option exercisable at 0.03 each on or before 31 December 2025. GBA Capital acted as lead manager for the placement and underwriter to the entitlement offer.
Once the placement is completed, the company will also conduct a 1-for-5 entitlement offer on the same terms as the placement to raise about $2 million. Adavale’s directors and management intend to subscribe for their rights in the entitlement offer totalling about $118,000.
Funds raised will be used to progress and accelerate nickel exploration at Kabanga Jirani, including downhole electromagnetic (DHEM) work, reverse circulation (RC) drilling, and diamond drilling, along with general working capital costs associated with the placement and entitlement offer.
Adavale says the 43.2 million additional placement shares to be issued are expected to be settled on or around 28 July 2023. Subject to shareholder approval being received in a general meeting, a further 43.2 million attaching options will be issued.
Commenting on the capital raise, Adavale Resources Executive Director David Riekie says: “The interest we received following the placement announcement was very positive, allowing us to accept further funds that give Adavale additional runway for its current exploration drilling program at Kabanga Jirani.
“these funds will allow us to drill additional targets as well as allowing flexibility to inject additional resources as exploration progresses”
With 2 rigs operating across multiple high-priority targets, these funds will allow us to drill additional targets as well as allowing flexibility to inject additional resources as exploration progresses.”
Adavale Resources is a Perth-based nickel sulphide explorer that holds the Kabanga Jirani Nickel Project, which covers 12 ‘highly prospective’ granted licences across about 1,216km-square of the Karagwe-Ankolean belt in Tanzania.
The company also holds exploration licences with sedimentary uranium potential within the north part of the Lake Frome Embayment in South Australia.
On 31 March 2023, Adavale had $2 million cash at hand, according to its latest presentation published on 21 June 2023.
Write to Harry Mulholland at Mining.com.au
Images: Adavale Resources Ltd
