Kalamazoo Resources (ASX:KZR) has received firm commitments for an oversubscribed $8 million placement to expand drilling at its Ashburton Gold Project in Western Australia.
The company increased the raise from the targeted $5 million following demand from new and existing investors.
Kalamazoo will issue 65.34 million shares at $0.12 each using its existing placement capacity. Its directors have committed to subscribe for a further 1.32 million shares to raise $158,657, subject to shareholder approval.
The issue price represents a 14.3% discount to Kalamazoo’s last closing price of $0.14 and a 10.5% discount to its five-day volume-weighted average price of $0.134.
Proceeds will primarily fund resource growth and extension drilling at Mt Olympus and across the broader 1.44-million-ounce Ashburton project.
Funding will also support an updated mineral resource estimate targeted for the December quarter, work on the Mt Olympus Prefeasibility Study (PFS), and selected exploration across Kalamazoo’s Western Australian and Victorian projects.
Executive Chairman Luke Reinehr says the additional funding will allow Kalamazoo to expand its next phase of drilling while continuing its resource and PFS.
“Our recently completed resource definition drilling program has reinforced our confidence in the quality and growth potential of Mt Olympus,” Reinehr says.
“With further assays pending, our focus is now turning to extension drilling at Mt Olympus and resource growth opportunities across the broader Ashburton Gold Project.”
Ashburton has mineral resources of 16.19 million tonnes (Mt) @ 2.8 grams per tonne gold (Au) for 1.44 million ounces (Moz). Mt Olympus accounts for 12.24Mt @ 2.7g/t Au for 1.07Moz.
Kalamazoo notes that placement shares are expected to settle on 23 July and be issued the following day. Petra Capital acted as sole lead manager and bookrunner.
Separately, Kalamazoo has signed a heads of agreement to acquire two tenements and one tenement application from First Western Gold, a subsidiary of Forrestania Resources (ASX:FRS), subject to due diligence and completion.
Under the agreement, Kalamazoo will issue 1.43 million shares at a deemed price of $0.14, escrowed for 12 months, and 344,827 options exercisable at $0.21 within three years as consideration for the tenements.
Kalamazoo Resources is an exploration company focusing on gold, lithium, and base metal deposits in Australia.
Write to France Pinzon at Mining.com.au
Images: Kalamazoo Resources
