St George Mining Ltd (ASX:SGQ) is out to raise $6 million to fund the next phase of exploration and development across its base metals project portfolio.
The West Aussie nickel-focused stock will secure $5 million from a strongly supported placement and hopes to raise a further $1 million under a share purchase plan (SPP), although it reserves the right to accept applications for up to $2 million at its discretion.
In a shot in the arm for the ASX-lister, two of the company’s key leaders have put up their hands to invest a cumulative $300,000 under the placement.
The funding runway will support work at St George’s flagship Mt Alexander asset, as well as exploration at the company’s other properties — including the Paterson Project — and for working capital.
Opportunity in burgeoning nickel sector
Speaking to the fundraise, St George executive chairman John Prineas said: “These capital raising initiatives will provide St George with a strong balance sheet to advance the exciting exploration and development assets in its portfolio, particularly at the Mt Alexander Project.
“With high-grade nickel-copper sulphide deposits discovered as shallow as 20 metres from surface across a large yet underexplored mineral system, Mt Alexander stands out as a significant opportunity for investors looking for growth opportunities in the nickel sector.
“The location of Mt Alexander in an established mining region of Western Australia further underscores its compelling development potential at a time when investors – and end users – worldwide are searching for the next generation of quality nickel sulphide supplies.
“We are committed to continuing to create substantial shareholder value and thank existing and new shareholders for recognising the strong upside that we have at St George."
Placement details
Under the capital raise’s placement arm, St George will issue just more than 96 million shares at $0.052 apiece, raising $5 million before costs.
New shares will be issued under the explorer’s existing placement capacity, and Cannacord Genuity acted as lead mananger to the placement.
Julian Hanna, who recently joined St George as general manager - growth and development, has committed to invest $100,000 in the placement.
In addition, executive chairman Prineas hopes to contribute $200,000, however, both these investments require the greenlight from shareholders.
SPP details
Eligible shareholders also have a chance to secure up to $30,000 worth of SGQ stock under the company’s share purchase plan.
Investors can buy in at the same price as St George’s placement shares and the company will raise as much as $2 million under the offer.
Those interested in investing will need to do so before the plan closes on Wednesday, April 13 — St George can also undertake a scale back and close the offer earlier, if need be.
An indicative timeline for the plan is mapped below:
About Mt Alexander
St George’s Mt Alexander Project is 120 kilometres south-southwest of the Agnew-Wiluna Belt, which hosts numerous world-class nickel deposits.
The project comprises six granted exploration licences, while a seventh granted exploration licence is to the southeast of the core tenement package.
The Cathedrals, Stricklands, Investigators and Radar nickel-copper-cobalt-platinum group element (PGE) discoveries are on one of the exploration licences, which is held in joint venture by St George (75%) and Western Areas Limited (25%).
St George manages the project, while Western Areas retains a non-contributing interest in the project until there is a decision to mine.
All other project tenements are owned 100% by St George.