Flynn Gold (ASX:FG1) has secured a binding option agreement to acquire 2 exploration licences covering 42km-square of ‘highly prospective’ lithium ground in Western Australia.
The licences sit 50km north of the Mount Holland lithium mine and 20km northeast of the Rio lithium deposit held by Zenith Minerals (ASX:ZNC).
Flynn plans to kick off exploration activities on the Parker Dome licences, including field reconnaissance, geological mapping, and soil sampling, as well as aircore and reverse circulation (RC) drilling of lithium pegmatite targets.
Flynn Gold Managing Director and Chief Executive Officer (CEO) Neil Marston says these licences complement the company’s projects at Forrestania and Lake Johnston.
“Historical RAB drilling on these licences have recorded pegmatite in the bottom of multiple holes over an extensive area with thicknesses of up to 12m.
Significantly, these drillholes were not assayed for lithium. Consequently, we intend making a rapid start to exploration activities to test these drill-ready lithium targets.”
Under the binding option agreement, Flynn, which has a market capitalisation of $8.72 million, is to pay a non-refundable option fee of $25,000 within 5 business days.
A total payment of $500,000 will be made from Flynn, of which $300,000 will be paid in cash and $200,000 will be paid in cash, or shares, at Flynn’s election, based on a 10-day volume weighted share price and subject to shareholder approval.
The company intends to fund the acquisition and exploration activities at the new licences, via a two-tranche placement and share purchase plan (SPP).
Flynn today (11 December 2023) reports it is raising $2.4 million and will combine its existing cash of $1.5 million, to fund exploration in Western Australia, along with gold and critical minerals exploration work in Tasmania.
Tranche one of the placement will comprise the issue of 7.9 million new fully paid ordinary shares at $0.06 per share to raise $560,000, whilst tranche two will comprise the issue of 20.7 million new fully paid ordinary shares at the same price to Flynn’s ‘largest’ shareholder ground and other directors to raise $1.24 million.
Henslow and Taylor Collison have been appointed as joint lead managers to the capital raising.
Meanwhile, the SPP aims to raise $600,000 via the issue of 10 million fully paid ordinary shares at the same price as the placement.
Existing eligible shareholders will be given the opportunity to subscribe for up to $30,000 per shareholder in the SPP.
Marston says the proceeds raised will be used to accelerate exploration activities at the company’s Western Australian projects, including on the exploration licences under option, and further activities at its Tasmania gold and critical minerals projects.
Flynn Gold is an Australian mineral explorer focused on its portfolio in Tasmania and Western Australia. The company’s portfolio is considered prospective for gold, tin, tungsten, zinc, lead, silver, and battery metals.
Write to Aaliyah Rogan at Mining.com.au
Images: Flynn Gold