Astro Resources NL (ASX:ARO) has raised a $3.553 million war chest from sophisticated investors to develop its existing precious metals and heavy mineral sand assets and take advantage of new gold opportunities in Nevada.
The multi-element explorer will issue 838.3 million shares at $0.004 apiece, with each security accompanied by two attaching options that can be exercised at $0.01 before April 21, 2022.
Major shareholder Holdmark Property Group will retain its 19.9% shareholding after subscribing for a further 202 million shares, reinforcing its ongoing support for the company.
Once the offer settles — expected no later than January 28 — Astro will have slightly more than 4.7 billion shares on issue, as well as just under 1.1 billion options.
ARO shares are up 25% in intraday trade, priced at $0.005 apiece.
Proposed use of funds.
Funding to buoy exploration strategy
Speaking on the capital raise, Astro Resources chair Jacob Khouri said: “We are delighted with the overwhelming interest and outcome of this capital raising by existing Astro shareholders and sophisticated investors, which allows us to continue our strategy developing our portfolio of projects, having secured the $3.553 million capital raising.
“The board is extremely pleased that our largest shareholder, Holdmark Property Group, continues to support the company by maintaining its 19.9% holding.
“The funds raised will enable Astro to continue with its Needles Gold Project drilling program and to further advance the Governor Broome HMS Project towards commercialisation.
“In addition, the raising allows us to further explore the proposed joint venture in Nevada with Pediment LLC, which includes significant project generation opportunities in Nevada.
“We are optimistic that positive news flow will continue across our dynamic portfolio of projects.”
Use of funds
With a cash injection under its belt, Astro is primed to prove up its exploration portfolio in Nevada and Western Australia.
The explorer is focused on developing its Needles Gold Project in Nevada, an asset with numerous old gold workings on epithermal gold veins.
A geophysics campaign has identified a large, strong chargeability anomaly at the property that warrants further exploration.
As a result, an initial diamond drilling program to test the anomaly is underway, with the first assays from the initial two holes anticipated mid-February 2022.
In WA, Astro is prospecting for heavy mineral sands at the Governor Broome asset.
The project carries 52 million tonnes of ore at 4.6% heavy minerals (HM) in the indicated category, as well as 66 million tonnes at 4.0% HM in inferred resources.
Astro has proposed an infill drilling campaign to upgrade resources at the recently acquired Jack Track deposits from the inferred to the indicated category.
With plans for a scoping study down the track, Astro believes Governor Broome has the potential to generate strong cash flows, with only modest capital required.
Beyond its current portfolio, the explorer has plans to expand its project base.
Astro is in joint venture negotiations with a North American company over a series of epithermal gold assets in northwest Nevada.
By expending $2 million into the special joint venture company, Astro can earn up to 70% of the projects.