Medallion Metals Ltd (ASX:MM8) has received binding commitments to raise $4.8 million through a heavily oversubscribed two tranche placement to rapidly advance the Ravensthorpe Gold Project in Western Australia.
The two-tranche placement comprises:
- The issue of 24.6 million fully paid ordinary shares to sophisticated investors at 19 cents per share as part of tranche 1; and
- The issue of 394,737 fully paid ordinary shares to directors of the company as part of Tranche 2 at the same issue price as the Tranche 1 placement.
Promisingly, Medallion will emerge with a strengthened cash balance of more than $8 million to accelerate exploration efforts and drill programs underway at the company’s projects, primarily the Ravensthorpe Gold Project (RGP).
“Multiple regional opportunities”
Medallion managing director Paul Bennett said: “Completion of this capital raising is critically important to maintain Medallion’s growth ambitions.
"We are now in a strong position to maintain a permanent drill presence at Ravensthorpe and keep our outstanding team together to continue to grow the resource and test the multiple regional opportunities.”
Placement summary
The issue price of 19 cents represents a 15.6% discount to the last traded price of 22.5 cents on November 22, 2021, and a 9.4% discount to the 15-day volume-weighted average (VWAP) price of 21 cents.
Tranche 1 placement shares are expected to settle on Wednesday, December 1, 2021, and commence trading on the ASX on a normal basis on Thursday, December 2, 2021.
Canaccord Genuity (TSX:CF, LSE:CF) acted as sole lead manager and bookrunner to the placement with Argonaut acting as co-manager.
Drill program
Medallion’s 32,000-metre drill program at the RGP is progressing rapidly with around 26,000 metres of reverse circulation (RC) and diamond drilling completed to date.
The drilling program is designed to extend the existing resources and test multiple regional exploration targets in a bid to continue delivering results for the company and its shareholders
A substantial proportion of the drilling is targeted at extending the existing mineral resource estimate of 8.8 million tonnes at 2.4 g/t gold for 674,000 ounces.
Usage of funds
Post the placement, Medallion will emerge with more than $8.1 million in cash to continue to rapidly advance the RGP.
The company expects a steady release of assay results into the future, along with the continuation of current drilling programs well into 2022.
Notably, Medallion is targeting the release of a substantial update to the global MRE at RGP in March 2022.