Silver City Minerals Ltd (ASX:SCI) has placed circa 49 million shares at an issue price of $0.04 to sophisticated investors, raising $1.96 million.
This will assist the company in funding a drilling program at its Copper Blow Project located near Broken Hill, considered to be a new iron oxide copper gold discovery.
READ: Silver City Minerals seeks to raise capital to develop Copper Blow copper-gold project
New cornerstone investor
A new cornerstone investor, Mr Geoff Loudon, through the established minerals and resources investment enterprise L&M Group, has taken up 13.25 million shares.
This represents 5.4% of the company’s expanded capital.
The issue price implies a 15% discount to the 10 day volume weighted average price (VWAP) of the company’s shares on the Australian Securities Exchange.
Positive share price response to raising
The placement which was well supported is expected to settle by 6 March 2018.
The market appears to have responded positively to the raising with the company's shares trading at a 15% premium to the issue price.
CBH Resources to contribute 25% of exploration expenditure
The Copper Blow project is a contributing joint venture between Silver City (75%) and CBH Resources Ltd (25%).
CBH is a large producer of silver, lead and zinc with its Endeavour Mine in New South Wales producing circa 35,000 tonnes of zinc and 17,000 tonnes of lead in concentrate.
The group also owns and operates the Rasp Mine and sulphide concentrator in Broken Hill 20 kilometres to the north of Copper Blow.
CBH has agreed to the next round of drilling and will contribute 25% to the exploration expenditure.