Peel Mining Ltd (ASX:PEX) has successfully completed an oversubscribed placement raising $3.6 million and will raise a further $8.7 million via a fully underwritten rights issue, for a total of $12.3 million.
The placement was strongly supported, with St Barbara Ltd (ASX:SBM) subscribing for $1.8 million, and the balance placed to institutional, sophisticated and strategic investors.
Peel is advancing its tenements in New South Wales, including the Wagga Tank-Southern Nights project, which is emerging as one of the most significant zinc polymetallic (zinc + copper, gold, silver, lead) discoveries in Australia in recent years.
READ: Peel Mining’s drilling continues to expand Wagga Tank-Southern Nights mineralised system
The capital raised will fully fund Peel to deliver a maiden JORC Resource at Wagga Tank, advance Mallee Bull towards production, and complete the acquisition of the 2% NSR (net smelter returns) royalty over Wagga Tank.
In that regard, Peel has now exercised its pre-emptive right to acquire the 2% NSR royalty for the tenements that it acquired from MMG Limited, including the Wagga Tank-Southern Nights project.
First right of refusal exercised by Peel
MMG Limited notified Peel on 10 August 2018 that it had received an offer from a TSX-listed royalty streaming business to purchase the 2% NSR royalty.
Pursuant to Peel’s first right of refusal under the Royalty Deeds, MMG offered to sell the 2% NSR royalty to Peel for $3.3 million in cash.
In accordance with the terms of the relevant Royalty Deeds, Peel has elected to exercise its right to acquire the royalty interests.
Following the acquisition, Peel will have unencumbered 100% ownership of the tenements acquired from MMG.
$8.7 million pro-rata rights issue
Peel is offering a fully underwritten non-renounceable pro-rata rights issue for eligible shareholders to subscribe for one new share for every eight shares held at the record date.
The company is aiming to raise up to $8.7 million at an issue price of 36 cents per new share (same price per share as the $3.6 million placement).
READ: Peel Mining retains speculative buy from Patersons as exploration news flow continues
Following completion of the placement and the rights Issue, Peel will be well-funded to:
• Purchase the 2% NSR Royalty from MMG delivering 100% ownership unencumbered;
• Continue to drill-out the Wagga Tank-Southern Nights discovery and deliver a maiden resource estimate in the first half of 2019;
• Advance exploration at some of the company’s exciting regional targets;
• Finalise the pre-feasibility study for Mallee Bull and commence the permitting process to advance Mallee Bull towards a potential near-term, low capex mining operation; and
• Continue Cobar Superbasin Project programs of work with joint venture partner JOGMEC (Japan Oil, Gas and Metals National Corporation).