Southern Cross Gold (ASX:SX2) is conducting a capital raising via an upsized private placement to raise C$143 million ($161.77 million), which will be used to fund several activities within the Victorian Goldfields region of Australia.
Stifel Nicolaus Canada and Aitken Mount Capital Partners have been appointed as joint lead managers and bookrunners to the placement, together with Jett Capital Advisors as co-manager.
Under the placement, shares will be issued at C$4.50 per common share and Chess Depositary Interests (CDIs) will be issued at $5.10 per CDI.
The issue price for the CDI represents an 8.9% discount to the last closing price on 28 April, while the issue price for the shares represents a 4.1% discount to the last closing price on the same date.
Southern Cross, which has a market capitalisation of $1.24 billion, intends to allocate C$53 million towards drilling to establish an inferred resource by Q1 2027 and C$27 million for 1km decline permitting and development to expedite access to mineralisation.
The company will also use C$4 million to undertake a Preliminary Economic Assessment, and the remaining C$59 million for exploration target expansion work, as well as regional exploration along the 12km mineralised trend.
CEO Michael Hudson says this C$143 million capital raise provides the company with full funding for the Sunday Creek work programs, enabling it to derisk and expand the project.
“This funding allows us to advance our drill programs, complete permitting for the underground tunnel to allow access for underground drilling, all of which will provide necessary information to complete economic studies,” Hudson says.
“Sunday Creek’s antimony component has attracted significant interest given current geopolitical factors, potentially positioning us as a key western supplier of this critical metal while we focus primarily on developing a high-grade gold project in a tier one jurisdiction.”
Southern Cross Gold operates three exploration projects, with two located in Victoria and one in Queensland, Australia.
In Victoria, the company owns the Sunday Creek and Redcastle projects.
Sunday Creek is a shallow orogenic Fosterville-style deposit, which is located 60km north of Melbourne. The project is considered prospective for gold and antimony.
Meanwhile, Redcastle is located 2km along strike north of the Costerfield Mine, which is one of the largest producers of antimony and among the highest grade gold mines.
Write to Aaliyah Rogan at Mining.com.au
Images: Southern Cross Gold
