Sky Metals Limited (ASX: SKY) has announced an encouraging update on its Cullarin Gold Project in NSW.
The company reported that exceptional support for share placement sees SKY fully funded to aggressively explore +20km strike potential of Cullarin Gold Project. SKY announced that it has raised $10.5 million to fast-track the exploration at the Cullarin project.
SKY said that drilling is set to re-commence at the shallow, high-grade Hume Target in March, targeting extensions to high grade gold intersected in maiden drill programme (93m @ 4.24g/t Au).
The company said that the previously un-assayed historic drill samples have been submitted for analysis.
Sky Metals announced that the regional exploration work will commence immediately to evaluate extent of the 4km Hume Target and potential repetitions along +20km strike.
Cullarin project
The Cullarin Gold Project is located 25km west of Goulburn in central New South Wales.
The area comprises volcanosedimentary rocks of the Silurian Campbells Group and is considered prospective for a range of gold-copper-zinc mineralisation types. SKY’s earning in the project is 80%.
Hume prospect
The Hume Prospect is located at the southern end of the Cullarin Project tenement (EL7954). Previous exploration in this area has focussed on VHMS base-metal mineralisation.
SKY, however, is targeting ‘McPhillamy’s Style’ gold mineralisation within the same rock sequence, but at a slighter lower stratigraphic level.
Drilling at Hume
SKY’s maiden drilling programme at the Hume Target was completed in January 2020 with two diamond core holes drilledapproximately 200m apart to test and extend the scale and tenor of gold mineralisation recorded in historic drilling.
Both holes, HUD001 and HUD002, intersected a broad package of strongly altered volcaniclastic rocks with associated zinc and lead sulphides, consistent with the target ‘McPhillamy’s style’ gold mineralisation.
Mineralisation in hole HUD002 was visibly stronger and included visible gold.
The results from drillhole HUD002 (shown above) indicated the potential for a significant shallow, high grade gold system at the Hume Target
Capital raising of $10.50 million
SKY announced that it has obtained binding commitments from sophisticated and institutional investors for a capital raising of $10.5 million (Placement).
The company said that the Placement will occur in two tranches with an initial placement of $5 million followed by a second tranche of $5.5 million subject to shareholder approval, including $473,000 committed by the Company’s Directors.
Details of share placement
The company reported that the Placement is being made to investors qualifying under Section 708 of the Corporations Act and the Company will use its existing placement capacity under Listing Rule 7.1 to complete the $5 million Tranche 1 issue.
SKY said that the $5.5 million Tranche 2 issue will be subject to shareholder approval. A Notice of Meeting will be distributed to shareholders on or around 9 March 2020.
The Placement to raise $10.5 million (before costs) will comprise the issue of 47,727,272 shares (being 22,727,272 shares in Tranche 1, and 25,000,000 shares in Tranche 2 subject to shareholder approval) at a price of $0.22 (being an 8.3% discount to last close, and an 18.4% discount to the 10-Day VWAP).
SKY said that its Directors have committed to subscribe for 2,150,000 shares in the placement to raise $473,000, subject to shareholder approval.
Key dates for Placement
SKY reported that the proposed key dates for the placement are as below.
- Announcement of the Placement – Monday, 24 February 2020
- Settlement of Tranche 1 – Friday, 28 February 2020
- Allotment of New Shares issued under Tranche 1 – Monday, 2 March 2020
- Dispatch of Notice of Meeting – Monday, 9 March 2020
- General Meeting – Wednesday, 8 April 2020
- Settlement of Tranche 2 – Wednesday, 15 April 2020
- Allotment of New Shares issued under Tranche 2 – Monday, 20 April 2020
Placement to fast-track Cullarin exploration
The company announced that the Placement will enable SKY to swiftly progress drilling and other exploration activities on its Cullarin Project.
SKY said that the follow up diamond drilling of the outstanding shallow results obtained from drillhole HUD002 (93m @ 4.2.4g/t Au) on the Hume Target will be the initial focus.
Management comments
SKY CEO Mark Arundell said: “The intersection of exceptional shallow gold mineralisation in SKY’s drillhole HUD002 indicates the potential of a significant gold system at the Cullarin Project.
This Placement will enable SKY to execute an accelerated exploration program that will initially target extensions to the mineralisation intersected in HUD002.
The exceptionally strong interest in this Placement is testament to the quality of SKY’s exploration strategy and ground position.”