Spartan reinforces coffers with $80 million equity raise

Spartan Resources (ASX:SPR) has tapped investors for $80 million via a fully underwritten equity raising comprising a $47 million institutional placement and a $33 million one-for-17 pro-rata accelerated non-renounceable entitlement offer. 

Canaccord Genuity (Australia), Sternship Advisers, and Euroz Hartleys are acting as underwriters and joint lead managers to the equity raising. Herbert Smith Freehills is acting as legal advisor to the company in relation to the equity raising.

Spartan, which has a $632.84 million market capitalisation, says about 138 million shares, being roughly 14% of existing shares on issue, will be issued at a fixed offer price of $0.58 per share. 

The price of the offer is a 11.5% discount to the last closing price of $0.655 per share on 17 April 2024, a 5.7% discount to the five-day volume weighted average price of $0.615 per share up to and including the same date, and a 10.2% discount to the theoretical ex-rights price of $0.646 per share.  

Proceeds will be used to underpin an expanded exploration campaign at its Dalgaranga Gold Project either this year (2024) or 2025, including accelerated resource extension drilling at the Never Never, Pepper, and broader Gilbey’s complex. 

The program will investigate “lookalike” targets, such as Sly Fox, Four Pillars, and West Wings.

Funds will also be used for the development of an underground exploration decline scheduled to begin in H2 2024, as well as site infrastructure early works, general working capital, care and maintenance, tenement commitments and transaction costs. 

Following completion of the equity raise, Spartan will have a pro-forma cash position of $110 million. 

Spartan Chairman Rowan Johnston and Non-Executive Director David Coyne have committed to taking up their full entitlements in the entitlement offer. Spartan Non-Executive Director Deanna Carpenter has also agreed to sub-underwrite $30,000 of the retail entitlement offer.

Managing Director and CEO Simon Lawson says the underground exploration decline will likely provide a pathway to restart mining at a time of a final investment decision to restart production.  

“This is a landmark capital raising for Spartan which puts the company in an exceptional position to deliver on the huge potential of the Never Never discovery and our other recent exploration successes at Dalgaranga,” he says.  

“The Spartan team is committed to ensuring a thorough and diligent approach is taken to the delineation of the high-grade orebodies at Dalgaranga. 

“The proceeds of this capital raise will ensure we have the balance sheet strength to progress our robust and thorough restart plan, and the financial flexibility to commence early works in advance of the restart decision.”

According to Spartan, the equity raising follows the company’s continued run of exploration at the Never Never deposit and the discovery of the Pepper deposit. 

The company’s Dalgaranga project sits 475km northeast of Perth and about 65km northwest of Mt Magnet.

Spartan Resources is a gold-focused company currently undergoing a restructuring as an advanced explorer.

Write to Adam Drought at Mining.com.au 

Images: Spartan Resources
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.