Ragnar Metals (ASX:RAG) has acquired a sizeable stake in gold miner Kaiser Reef (ASX:KAU), which is looking to boost operations at its A1 Nova Gold Project in eastern Victoria.
This strategic investment was implemented following a due diligence period undertaken by Ragnar, which focused on the start of mining in unexploited areas at Kaiser’s A1 mine.
Under the strategic investment agreement, Ragnar will inject just over $5 million via a two-tranche placement, which is expected to be completed by 18 July 2024.
Tranche one will consist of 6.2 million shares and 3.1 million unlisted options worth $980,000, while the second includes 27.2 million shares and 13.6 million unlisted options worth $4.08 million.
The issue price of $0.15 per share does not represent a discount.
Ragnar will also receive a 1.5% net smelter return royalty on gold produced from the A1 Gold Mine for a five-year period, starting on 1 July 2025.
Funds from the placement will finance the establishment and deployment of the Nova Gold Project team, which will be working alongside the current mining crews until the project is commissioned.
Ragnar Chairman Steve Formica has also been appointed as non-executive chairman of Kaiser Reef. Subject to shareholder approval, Kaiser has agreed to issue Formica 2 million options exercisable at $0.25 for a period of four years.
Formica says this agreement provides Ragnar shareholders with diversity and exposure to gold as the company advances its critical minerals exploration work in Sweden.
Kaiser’s new mine development is expected to increase gold production. Meanwhile, the engineering plan will involve creating a modern engineered mine layout without the compromises faced by the current operations.
Write to Aaliyah Rogan at Mining.com.au
Images: Kaiser Reef
