Tolu banks $8.8 million to fast track PNG gold exploration 

Tolu Minerals (ASX:TOK) has tapped existing and new institutional shareholders for $8.8 million via a placement. 

Argonaut Securities was retained as lead manager to the placement. 

Tolu, which has a $66.1 million market capitalisation, says about 16.7 million shares will be issued at $0.50 per share. 

Managing Director and CEO Iain Macpherson and non-executive director Larry Andagali have both provided firm commitments of $200,000 and roughly $250,000, respectively.

The price of the placement is a 13% discount to Tolu’s last traded price of $0.575 on 16 April 2024 and a discount of 13.5% to the five-day volume weighted average price of $0.578. 

According to Tolu, the placement received high demand during the bookbuild from both existing and new domestic and offshore institutional investors. This resulted in two Tolu seed investors agreeing to sell an additional 4.6 million shares at the same price as the placement as a concurrent selldown. 

Martin Place Securities and Amvest Capital were enlisted to aid in the selldown. 

Funds will be used to accelerate exploration activities, specifically an airborne survey and follow-on drilling at the Tolukuma Gold Mine in the Goilala District of Papua New Guinea. 

The survey is scheduled to be undertaken in the coming months. 

Placement proceeds will also be used for exploration support activities and general working capital. 

Macpherson says the strong demand for the placement is confirmation that the company’s strategy of leveraging existing infrastructure of Tolukuma resonates well with shareholders and the market.     

“I am particularly pleased with the ongoing support of existing shareholders coupled with new investments from a number of leading global institutional gold funds,” he says. 

The placement will enable Tolu to build on the significant advances made since the IPO in November last year and accelerate project exploration and development works. 

The survey work was instrumental in the value creation path of fellow PNG gold company K92, which we aim to emulate.”

Alongside the Tolukuma gold mine, Tolu also owns the Tolukuma Structure and the Mt Penck Exploration projects in Papua New Guinea.

Write to Adam Drought at Mining.com.au

Images: Tolu Minerals
Author Image
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.