Alchemy Resources Limited (ASX:ALY) has completed a placement for approximately $1.85 million as part of a $3.1 million capital raising to fund a range of drilling programs across its WA and NSW base metals assets.
The company received strong support at $0.011 per share from new and existing institutional and sophisticated investors who are keen to see ALY take an aggressive approach to work at its Karonie/Lake Rebecca gold projects in WA and the Cobar Basin projects in NSW.
The issue price of $0.011 represents a 15.4% discount to ALY’s last close on October 6, 2021, of $0.013, a 19.7% discount to the 5-day VWAP of $0.0137 and a 20.9% discount to the 15-day VWAP of $0.0139. Placement shares are expected to be quoted on the ASX on Wednesday, October 20.
ALY will now launch a non-renounceable entitlement offer to existing shareholders to raise a further $1.23 million before costs, taking the total raised to $3.1 million and adding to existing cash reserves of $900,000. New shares under the entitlement offer will be issued on Monday, November 15.
Showing his confidence in the upcoming programs, Alchemy chief executive officer James Wilson intends to participate in the placement for approximately $60,000 via the issue of 5,454,545 new shares.
Aggressive drill program now funded
The money raised by ALY will be used to drill several targets across its NSW and WA gold and base metals projects.
Drilling is expected to begin in December, with programs including:
- Diamond (DD)/reverse circulation (RC)/aircore (AC) drilling programs at the Karonie Gold Project in WA, to follow up resource extension opportunities and identified high priority regional targets;
- AC drilling, geochemical and targeted geophysical campaign at the Lake Rebecca Gold Project in WA, to refine and target significant gold anomalies; and
- DD/RC drilling at the Overflow and Yellow Mountain gold/base metals projects in the Cobar Basin of NSW to test for extensions to existing mineralisation.
"Endorsement" of projects
“Alchemy is delighted with the strong support for the capital raising and is pleased to welcome a number of new sophisticated and institutional shareholders to the company,” Alchemy’s chairman Lindsay Dudfield said.
“The success of the raising is an endorsement of both the prospectivity of Alchemy’s gold and base metal assets and the quality of our exploration team led by CEO James Wilson.
"We now have the balance sheet to accelerate our exploration programs across Western Australia and NSW and look forward to updating shareholders on the results of these programs over the coming months.”
What to expect next
ALY has a busy schedule ahead.
Detailed magnetics at Karonie are expected to be completed in coming weeks, with access agreements for Karonie scheduled for completion in October/November 2021.
Drilling is set to commence in December 2021 or early January 2022 dependent on availability of equipment.
At the same time Alchemy has submitted applications for government co-funding on its WA and NSW exploration programs with notification expected in Q4-CY21.
Heritage agreements continue to be progressed for Lake Rebecca and it is anticipated that Alchemy could finalise these agreements during Q4-CY21.
The timeline will have most programs underway in Q4 2021:
About Alchemy
Alchemy has built a significant land package in the Carosue Dam-Karonie greenstone belt in the Eastern Goldfields region in Western Australia and has an 80% interest in the Lachlan/Cobar Basin Projects in New South Wales.
The company also maintains its interest in the Bryah Basin Project in the gold and base metal-rich Gascoyne region of Western Australia, where Superior Gold Inc, and Sandfire Resources Limited are continuing to advance gold and base metal exploration, respectively.