Auroch Minerals Ltd (ASX:AOU) (FRA:T59) has announced another large tranche of option conversions, predominantly by a group of key cornerstone investors, to contribute around $1.3 million to the working capital of the company.
The cornerstone investors comprise long-term sophisticated investors with significant investment and minerals experience, many of whom were original investors in the company’s IPO and are currently the top 20 shareholders.
A further 11.1 million have been exercised at $0.10 each and an additional 2 million options have been exercised at $0.12 each - well before their expiry date in 2023.
“Endorsement of the portfolio”
This continued support via the conversion of these options well ahead of expiry further endorses the company’s strategic portfolio of high-grade nickel sulphide projects in Western Australia, which includes Saints Nickel Project and Leinster Nickel Project and the recently acquired Nepean Nickel Project.
Auroch managing director Aidan Platel said: “We are very pleased by the strong show of support from such a core group of our shareholders, which is a great endorsement to the company itself and to its portfolio of high-grade, high-potential nickel sulphide assets in WA.
“This inflow of capital combined with our existing cash balance puts Auroch in a great position to carry out the aggressive exploration programs scheduled for 2021, as well as develop and build upon the high-grade resources at all three of our nickel sulphide projects as we move towards scoping studies and possible development.”
Aggressive exploration planned
The capital raised through the exercise of these options builds on the company’s existing strong cash position of $3.2 million and provides the funding for the aggressive exploration programs scheduled for this year.
The company plans to complete a 3,500 metres reverse circulation (RC) drilling program, which is already underway at Nepean to test near near-mine extensions to the high-grade nickel sulphide mineralisation, as well as previously untested high-priority targets along the 10 kilometres of underexplored strike.
Down-hole (DHEM) and surface MLEM surveys at Nepean, as well as air-core and other geochemical surface sampling programs, will be carried out to define and refine drill targets for the next round of RC drilling to start late in March.
At the Leinster Project, Auroch also plans to complete a 3,000-metre RC drill program to test exciting high-potential targets along strike from the Horn, as well as other greenfield prospects such as Firefly and North Sinclair.
The company also plans to complete a 1,500-metres RC drill program at the Saints Project to test for ‘feeder channel’ massive nickel sulphide mineralisation at the T4, T5 and T6 prospects.
Financial outlook
The company looks forward to receiving further tranches of its 39.7 million outstanding $0.10 options conversions prior to their expiry in November 2021.
This will remove any medium-term cash risk and provide the company with sufficient funding for planned exploration and resource drilling, leading towards the goal of JORC (2012) compliant resource estimates for all three nickel sulphide projects by the year’s end.