Variscan Mines Ltd (ASX:VAR) has received binding commitments for a placement to raise $4.25 million by issuing 53,125,000 shares at a price of $0.08 per new share.
The placement, which was oversubscribed and well supported by a number of existing shareholders, will introduce several new, high-quality institutional and sophisticated investors, whilst also being well supported by existing significant shareholders of the company, including its managing director Stewart Dickson.
Notable investor interest from North America, UK, Europe and Asia for the placement represents a strong endorsement of Variscan’s recent zinc-lead discovery and planned follow-up drilling campaign.
“Pleased with the outcome”
Variscan's MD and chief executive officer Stewart Dickson said: “We are pleased with the outcome of the placement that was well supported by existing shareholders and a number of new institutional investors.
“The placement received very strong interest with demand exceeding the funds ultimately being sought by the company and utilising available placement capacity in a quickly executed transaction.
“With the recent success drilling at the San Jose Mine, we are excited to continue the momentum by accelerating exploration efforts throughout the remainder of 2021.”
Aggressive exploration program
The placement will position Variscan with a strong cash balance of around $5 million to execute an aggressive exploration program over the Novales-Udias Project, including follow-up drilling at the San Jose Mine and drilling high priority targets on the highly prospective surrounding Buenahora licence area.
The drilling program is set to re-start shortly with contractor discussions well advanced and assay results from an additional 30 drill holes expected in the coming weeks with occurrences of visible zinc mineralization from logging noted.
Placement details
The issue price of $0.08 represents a 14.8% discount to Variscan’s last closing price of $0.094 per share on June 16, 2021, a 13.9% discount to the 15-day VWAP of $0.093 per share.
The company will issue 31,201,798 shares using the company’s existing 15% placement capacity in accordance with Listing Rule 7.1 while 21,298,202 shares will be issued under the company’s existing 10% placement capacity in accordance with Listing Rule 7.1A.
The balance of 625,000 shares for $50,000 will be taken up by an entity associated with managing director Dickson, subject to shareholder approval.
New shares issued under the placement will rank equally with existing shares on issue.
Settlement of the first tranche of the placement is scheduled to occur on June 25, 2021, with the issue and trading of new shares expected to start on 28 June 2021.
Canaccord Genuity acted as lead manager to the placement.
Looking ahead
The company’s immediate focus is progressing with the following key activities:
- Receiving and interpreting assay results from drilling at the SouthWest Zone of the San Jose Mine;
- Mapping and sampling of surface drill targets over the Buenahora license area;
- Surface drilling permitting application pending;
- Surface and/or follow-up underground drilling in Q3 2021; and
- Mapping and sampling of drill targets over the Guajaraz Project in Castilla La Mancha.
A notice of the general meeting will be circulated in due course.