St George Mining (ASX:SGQ) is raising $500,000 through a share placement priced at $0.09 to UK investment trust City Natural Resources High Yield Trust PLC.
Worth noting, trust manager New City Investment Managers has a track record of successful investment in Australian resources companies, including an early stage investment in Sirius Resources (ASX:SIR).
The placement also represents a premium to today’s opening share price of $0.085.
Proceeds will be applied towards continued exploration at the company’s wholly-owned East Laverton Nickel Sulphide Project in Western Australia.
This follows the company raising $1,050,000 through an oversubscribed placement of 15,000,000 shares at $0.07 per share earlier this month.
“We are very pleased to welcome New City, a global investor with a record of successful investment in the Australian nickel space, as a strategic shareholder in St George. This is an important milestone for our company,” executive chairman John Prineas said.
“The tremendous potential of our project is increasingly being recognised by a wider range of investors.
“Our compelling pipeline of prospects together with growing investor support gives us a strong platform from which to deliver exploration success.”
A General Meeting of Shareholders will be held soon to ratify and approve the capital raising completed on 9th June 2015 as well as the placement to New City.
Placement Details
The placement consists of 5,555,556 ordinary shares priced at $0.09 each.
This includes one free option for every three new shares acquired.
New City is part of CQS - a global multi-strategy asset management firm with over US$18 billion under management.
Current Activity
Drilling is ongoing at the under-explored East Laverton project with the first hole intersecting elevated nickel levels and confirming the prospective high MgO zone at depth at the Cambridge prospect.
A second hole is being drilled to test for the southern extension of the prospective high MgO zone while drilling is expected to begin later this week on the highly anticipated EM targets that were selected by geophysical advisors Newexco.
East Laverton Nickel Sulphide Project
St George Mining holds a dominant 2,000 square kilometre landholding in this frontier region of Western Australia.
While BHP withdrew from the farm-in for corporate reasons, it left the company with a 100% ownership of all nickel rights as well as a $3 million dataset.
The mining giant’s work also established the credentials of the project for large scale nickel sulphide mineralisation and interest from major mining companies continues.
Subsequent work by St George has proven the presence of geological criteria required to host multiple nickel deposits.
The project has similar features to other highly mineralised komatiite nickel sulphide belts in the Yilgarn Craton.
Analysis
The addition of UK investment trust New City as a strategic shareholder underscores the potential of St George Mining’s East Laverton Nickel Sulphide Project.
New City has already proven to be an astute judge of Australian resource companies having made an early stage investment in Sirius Resources, which is the currently subject of a $1.8 billion takeover by Independence Group (ASX:IGO).
That the placement at $0.09 is at a premium to today’s opening share price of $0.085 lends further support.
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