Lion Selection Group (ASX:LSX) has committed to invest $1 million as part of a $6.5 million capital raising announced by Medallion Metals (ASX:MM8).
Medallion owns the Ravensthorpe Gold Project, located in the Southern Goldfields of Western Australia with an established mineral resource estimate of 1.62 million ounces of gold equivalent.
A Prefeasibility Study (PFS) completed in 2023 contemplated development of open pit and underground mining to produce gold and copper after the development of a new, purpose-built process facility at site.
Prior to the PFS, a Scoping Study demonstrated that processing of ore mined from an underground mine at Ravensthorpe, trucked and processed at Forrestania, would offer a lower cost, more rapid development alternative with a reduced footprint of disturbance.
Final investment decision is targeted for late 2025.
In August 2024, Medallion entered exclusive negotiations with IGO (ASX:IGO) to acquire an existing process plant, associated infrastructure and certain tenements from IGO.
Should Medallion be able to complete a transaction to acquire a ready-made processing option as contemplated from IGO, Lion Managing Director Hedley Widdup says it would become a near-term candidate to make the transition to gold producer and take advantage of record high gold prices. Medallion’s fund raising was conducted at $0.10 per share.
Placement of shares are expected to settle on 7 February and begin trading on the ASX on a normal basis the following day.
Canaccord Genuity acted as the sole lead manager and bookrunner to the placement.
Widdup says Medallion has been previously overlooked by investors as they contemplated a stand-alone development due to some of the challenges that face all potential project developers.
“The option to acquire a ready-made processing facility, should it be exercised, would reduce the hurdles to gold production significantly as the need to permit, clear vegetation and raise money to build a process facility are negated,” he says.
“In addition, Medallion’s underground mining inventory is an unchallenging portion of the total fresh rock resource, which is currently being infill drilled. We (Lion Selection Group) think Medallion has become a much lower risk development proposition and is also now catalyst rich.
“We are pleased to become shareholders and note that gold producer Alkane Resources has followed on from a previous investment in Medallion in this fund raising”.
Medallion Managing Director Paul Bennett says the company emerges from the capital raising well-funded to accelerate the sulphide development strategy with the gold price at record levels.
The gold price is currently sitting at just over $4,559 (US$2,788) an ounce.
Upon settlement of the placement shares, Medallion expects its pro-forma cash balance to total $9.5 million.
Write to Adam Orlando at Mining.com.au
Images: Medallion
