Westar Resources Ltd (ASX:WSR) has completed a placement to raise approximately $2 million (before costs) at an issue price of $0.095, representing a 2.6% discount to the 5-day VWAP last closing price.
Directors have contributed $60,000 as part of the Conditional Placement Shares with the issue subject to shareholder approval.
Approximately $538,000 in shares will be issued as part of a two-tranche placement, with the remaining securities subject to shareholder approval at a shareholder meeting to be held shortly.
The placement was supported by several high quality new and existing sophisticated and professional investors.
Funds raised will enable WST to accelerate exploration activities at the Gidgee North project, with drilling of multiple VMS-style base metal targets (copper-zinc-silver-gold) scheduled early next quarter.
Drilling is expected to start early in quarter two of 2022.
“With encouraging exploration results coming from Gidgee North, we are pleased to have the ongoing support of existing shareholders and also welcome a number of new sophisticated investors, Westar managing director Karl Jupp said.
"The placement provides the company with a strong cash position to commence drilling and continue additional exploration at the Gidgee North project which hosts both gold and VMS base-metal targets with historic copper and zinc drill intercepts.”
Use of funds
WST has set out a raft of project specifics that will benefit from the raise.
The company is focused on the development of high-quality gold and base-metal assets in Western Australia. Westar’s projects are strategically located in highly prospective areas in some of WA’s most prolific goldfields including Sandstone, Mt Magnet, Southern Cross and Nullagine.
Money will be used for the following:
- A maiden RC drill program at its 100%-owned VMS-base metals targets at the Gidgee North Project;
- DHEM surveys on priority RC drill-holes at Gidgee North;
- Soil geochemistry, geophysics and targeting of additional prospects at Gidgee North between the Breakaway Bore and Griffin prospects;
- RC drilling of identified gold targets at the historical Birrigrin Mining Centre, Gidgee South Project;
- Field reconnaissance and soil geochemistry over the Opaline Well AEM identified conductors; and
- Corporate costs and general working capital requirements.
The immediate priority for WST is the start of RC drilling at the VMS style base-metal targets at the Gidgee North Project.
This maiden RC drilling program will initially test up to 10 priority VMS targets, including Geo, NW Gossan, Moses, Discrete, Gumtree, Airstrip (two targets), Breakaway Bore (two targets) and Vela (historical intercepts include 8 metres at 1.12% copper from 48 metres to EOH in GVER101).
Funds from the placement will allow WSR to accelerate exploration, via additional step-out drilling, pending the success of initial priority holes and the DHEM surveys.