Predictive Discovery Ltd (ASX:PDI) plans to raise up to A$4 million through a placement and share purchase plan (SPP) to continue developing its gold projects in West Africa.
The company has signed a non-binding term sheet to raise A$1-2 million from the Sprott Group of companies. Sprott is a globally renown Canadian resources investor.
Commitments for A$1.2 million have been sourced from other sophisticated and institutional investors and the SPP will launch next week raising up to A$0.8 million.
Predictive’s two largest shareholders, Aurora Minerals Limited (ASX: ARM) and the Lowell Resources Fund have committed to invest a combined value of A$850,000.
The next field season in West Africa commences in October 2016.
Sprott involvement
Sprott is a large and well known North-American based asset management firm with a strong record in identifying and funding successful early stage resource companies.
The Sprott part of the capital raising is subject to shareholder approval, completion by Sprott of satisfactory due diligence and execution of a finders agreement.
Funds raised will be placed into escrow on the closing date and released to the company following shareholder approval.
A shareholder meeting to approve the raising will be held in late September or early October, 2016.
Use of funds
The funds will be employed to support the Toro Gold joint venture in Cote D’Ivoire, Bobossa joint venture in Cote D’Ivoire and Burkina Faso permits.
Predictive is in joint venture able to earn up to 65% with the UK-based Toro Gold Limited on six granted permits and two permit applications.
Recent drill results from Toro include:
- 20 metres at 10.5 g/t gold from 38 metres including 1 metre at 114 g/t gold (Nyangboue prospect);
- 20 metres at 4.8 g/t gold from 3 metres (Nyangboue prospect); and
- 7.5 metres at 16.0 g/t gold from surface (Kokoumbo Hill prospect).
Analysis
Predictive have a number of promising gold prospects across its projects in West Africa and this funding will provide the company with options to advance multiple prospects.
Sprott’s decision to support Predictive is a strong endorsement of the company’s strategy, management and projects in West Africa.
Exploration success over the past two months has helped the share price perform well, up over 250% year to date.
News flow is expected in the coming weeks, with assays pending for 57 holes.
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