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AuKing Mining launches $7.1 million cap raise to boost exploration and acquire Koongie Park interest

Last updated: 03:41 20 Apr 2022 BST, First published: 02:41 20 Apr 2022 BST

AuKing Mining Ltd -

AuKing Mining Ltd (ASX:AKN) is out to raise $7.1 million via a two-tranche placement and rights issue.

The polymetallic explorer has secured firm commitments to conduct a $3.6 million placement at 14 cents per share, raising the capital from sophisticated and professional investors.

In addition, it has launched a pro-rata, non-renounceable, one-for-three rights issue on the same terms to raise the remaining $3.5 million.

AKN plans to use the funding to further drilling activity at its polymetallic Onedin, Sandiego and Emull deposits.

It’s also looking to acquire the remaining 25% interest in the Koongie Park joint venture in northeast WA, as well as 100% of the platinum group element (PGE) rights across the Koongie Park tenure, as announced earlier this month.

Multi-purpose raising

Commenting on the raise, AuKing CEO Paul Williams said: “We are very pleased to have completed the first stage of the proposed $7.1 million capital raising with significant interest in the $3.6 million placement.

“This funding will enable AKN to carry out its extensive proposed drilling and exploration program for 2022.

“The second stage of the funding program involves the opportunity for existing AKN holders to acquire shares on the same terms as those made available to the sophisticated and professional investors under the placement.

“Provision is made under the rights issue for existing holders (if they wish) to apply for more than their allocation.

“On successful completion of the rights issue, AKN will then proceed to complete its acquisition of the 25% joint venture and 100% of the PGE/gold interests at Koongie Park.”

Two-tranche placement

AuKing will execute the first phase of its capital raise — the $3.61 million placement — in two tranches.

The first lot of 18.8 million shares is expected to settle shortly, while the remaining 7 million require shareholder approval to vest.

AKN has an annual general meeting scheduled in late May, and it plans to seek shareholder approval then.

The placement price — 14 cents per share — is a 12.5% discount to AKN’s last trading price, and a 23.5% discount to the 15-day volume-weighted average price.

Under both the placement and the rights issue, AuKing plans to offer one new free-attaching option for every three shares subscribed for, subject to shareholder approval.

Investment company Vert Capital stepped in as the placement’s lead manager.

Non-renounceable rights issue

Beyond the placement, AuKing hopes to bring in a further $3.51 million via its rights issue at the same share price as the placement.

What’s more, eligible shareholders will be able (if they wish and subject to final allocations) to apply for more than their entitlement under the offer.

Assuming no existing options on issue in the company are exercised prior to the record date, around 25.2 million new shares (and 8.4 million free-attaching options) will be offered under the rights issue.

The offer is set to open on Wednesday, April 27 and close on Monday, May 16. Shares are expected to begin trading on Tuesday, May 24.

Use of funds

On April 5, AuKing announced it had struck a deal with fellow ASX-lister Anglo Australian Resources NL (ASX:AAR) (AAR (NYSE:AIR)) to acquire the remaining 25% stake in the Koongie Park Project and acquire PGE rights across the tenure.

These rights were previously excluded from Koongie Park, giving AAR (NYSE:AIR) exclusive access to explore and develop gold and PGEs across the rights.

AuKing is particularly eager to explore for these minerals given Pantoro Ltd (ASX:PNR)’s recent success at the nearby Lamboo PGE project, where it uncovered PGE mineralisation in the lower and ultramafic portions of the Lamboo Igneous Complex.

As outlined below, that same ultramafic unit (called McIntosh) extends across a significant area of Koongie Park tenures – establishing what could be 12 strike kilometres of PGE mineralisation.

The Koongie Park acquisition will set the company back $6 million, but it’s payable across three tranches.

The first $3 million tranche, payable in cash, is due in May, so AuKing will use its cash injection to cover this instalment.

AuKing will also use the funding runway to accelerate drilling and other exploration work across three key targets: the Onedin, Sandiego and Emull deposits.

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