Alkane to raise $55m

Alkane Resources has received commitments to raise $20 million through a share placement, and up to $34.8 million through a 1-for-8 rights issue, to accelerate exploration and development programs in the Tomingley gold corridor in New South Wales.

Under the placement, Alkane will issue approximately 36.4 million shares at 55 cents per share, with Hartleys and Petra Capital acting as joint lead managers and bookrunners.

Existing shareholder Abbotsleigh, associated with Alkane chairman Ian Gandel, has agreed to subscribe for $4.73 million worth of new shares.

Alkane said its directors and several major shareholders, representing approximately 26 per cent of current shares on issue, have committed to take up their entitlements under the rights issue for a combined subscription of $9 million.

The miner said the proceeds would fund drilling across the Tomingley corridor, including at the Roswell, San Antonio and Boda prospects.

Alkane will develop an underground exploration decline, with approvals expected in January, to drive underground from the existing Wyoming One mine to Roswell and San Antonio.

It said it would also use the funds to purchase land over a section of the Tomingley corridor (currently under option), which the company said would be suitable for a ventilation rise to support the decline.

Alkane Resources managing director Nicholas Earner said the accelerated development timetable would help the company return to full mill utilisation at the Tomingley corridor.

“With the continued strength of gold prices, in Australian dollar terms, and processing infrastructure already in place, ongoing operating cash flow generated at Tomingley will be excellent support for the balance of the business,” Mr Earner said.

“Alkane’s 2020 program aims not only to assess Boda and surrounding mineralisation, but also to test other Boda-style targets across our licences.”

He said the capital raising would ensure Alkane is well-funded for its accelerated 2020 exploration and development programs.

Shares in Alkane Resources were down 6.56 per cent to trade at 57 cents per share, as at 3:28pm AEDT.