St George Mining Ltd (ASX:SGQ) has received strong support in an oversubscribed placement showing investor’s continued support even after the recent share price gains.
The company raised A$6.47 million from sophisticated and institutional investors to accelerate exploration at the Mt Alexander high grade nickel-copper sulphide project.
The flagship Mt Alexander project alongside the East Laverton and Hawaii projects are located in the Yilgarn Craton region of Western Australia.
John Prineas, executive chairman, commented: “The placement provides St George with a strong balance sheet that allows us to vigorously progress the tremendous exploration opportunity at the Mt Alexander Project.
“Since commencing drilling at the project earlier this year, we have intersected massive nickel-copper sulphides at three prospects and expanded the Cathedrals nickel‐copper sulphide belt to 3.5 kilometres of recurrent mineralisation.”
Placement details
A total of 43,165,470 shares will be issued at $0.15 per share to raise A$6.47 million.
Shares will come with one free attaching option exercisable at $0.20 on or before 30 June 2017 for every five shares applied for.
The new funds will allow St George to aggressively continue exploration activities at the Mt Alexander Project where nickel‐copper sulphides have been discovered over a broad area, supporting the potential for a new nickel sulphide camp.
Mt Alexander
The Mt Alexander Project is located 120 kilometres south-southwest of the Agnew-Wiluna belt which hosts numerous world class nickel deposits.
The project comprises three granted exploration licences – E29/638, E29/548 and E29/962.
Cathedrals, Stricklands and the Investigators prospects are located on E29/638, which is held in joint venture by Western Areas Limited (25%) and St George (75%).
St George is the manager of the project with Western Areas retaining a 25% non-contributing interest in the project (in regard to E29/638 only) until there is a decision to mine.
Drilling
St George is conducting additional drilling at Mt Alexander to test three strong EM conductors at the Investigators Prospect.
St George's first drill program at Mt Alexander commenced in April 2016, and in a short space of time the company made new discoveries of massive sulphides at the Stricklands and Investigators Prospects.
This added to the discovery made by BHP Billiton at the Cathedrals Prospect.
Analysis
The investor support St George has experienced in this placement not only provides funding for the ongoing exploration programs but supports the exploration potential of the company’s projects.
Preliminary XRF readings on drill core to date has seen multiple massive sulphide sections yielding up to 13.1% copper and 8.7% nickel.
The shallow mineralisation provides for low cost exploration and supports favourable project economics.
The diamond drilling now in progress at Mt Alexander to test EM conductors will act as a near term potential value driver for the company.
The company is trading above the placement price and is up 130% year to date at $0.165.
The major shareholders include a number of resources focused funds, John Prineas, the executive chairman and ASX-listed nickel producer Western Areas Ltd (ASX:WSA).
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