Alto Metals Ltd (ASX:AME) will raise $3 million (before costs) through the issue of 46,153,846 shares at an issue price of $0.065 per share.
Money from the well-supported placement will be used for ongoing drilling at AME’s 100%-owned Sandstone Gold Project in Western Australia where it is looking to drive further resource growth and new discoveries.
Notably, Alto directors have committed $650,000 in strong support of the company’s aims.
Alto will also undertake a share purchase plan (SPP) on the same terms as the placement, to raise a further $1 million.
“Our drilling campaign this year at our Sandstone Gold Project continues to deliver outstanding shallow, high-grade results and which we are confident will drive significant future resource growth," Alto’s managing director Matthew Bowles said.
"The capital raising positions us well as we head into 2023, allowing us to continue focusing on the resource drilling and mineral resource work, while at the same time preparing to commence our first drilling program at the exciting high-grade Oroya mine later this month..
“We are extremely pleased with the overwhelming support in the placement from our existing shareholders and new investors, which is a strong endorsement of the quality of our Sandstone Gold Project, and I would like to thank everyone who participated for their support.
"We are also pleased to offer all shareholders the opportunity to participate in the share purchase plan as we look to continue to advance this outstanding gold project.”
Use of funds
Alto is focused on growing the existing resources within the Alpha Domain, while continuing to review the multiple advanced brownfield prospects, within the +750 square kilometres Sandstone Gold Project.
Its longer-term strategy is to continue to advance the overall project pipeline.
The money raised from the placement and SPP is planned to primarily be used to continue the ongoing resource drilling at Indomitable, the updated global mineral resource update planned for March quarter 2023 and commence the next phase of exploration and drilling.
Based on the successful exploration results received to date, future exploration activities shall focus on:
- Ongoing extensional and resource drilling at Indomitable, where drilling continues to intercept shallow, high-grade oxide mineralisation.
- First-pass RC drilling at the historic high-grade Oroya gold mine where significant mineralised material remains due to historical mining activities focusing only on bonanza-style mineralisation.
- Low-cost geochemical sampling over priority regional targets including Hacks West and Sandstone North.
- Updating to the current 635,000-ounce mineral resource for the Sandstone Gold Project.
The updated mineral resource, planned for completion during the March quarter of 2023, is expected to include the results from the additional drilling completed at Lord Nelson earlier in the year and the results announced to date from drilling at Indomitable.
The proceeds will also be used for costs associated with the capital raising, corporate and working capital purposes.
Assays remain pending from more than 10,000 metres of RC drilling at Indomitable as part of the ongoing resource drilling.
About the placement
The placement is to institutional, professional and sophisticated investors, with new shares expected to go out on or around Thursday, November 10, 2022.
New shares to be issued under the placement are fully-paid ordinary shares and will rank equally with existing shares on issue. The issue price of $0.065 represents a discount of 13.3% to the 15 day VWAP and last closing price of $0.075.
SPP details
The share purchase plan gives eligible shareholders the opportunity to participate in a non-underwritten SPP to raise an additional $1 million.
Shareholders will have the opportunity to apply for up to $30,000 of new shares without incurring brokerage or other transaction costs.
New shares issued under the SPP will be issued at the same price as the new shares issued under the placement.
The SPP offer period will open on Thursday, November 10, 2022, and is expected to close at 5:00pm (Perth time) on Friday, December 2, 2022.