Avalon Minerals to raise up to $28m

Avalon Minerals has announced plans to raise up to $28 million, fully funding the company to complete a bankable feasibility study at its flagship Viscaria copper-iron development in northern Sweden.

The Perth-based explorer said today it had signed a memorandum of understanding with Malaysian advisory group ZJ Advisory Sdn Bhd for a two tranche share placement totalling $25 million.

Both tranches, which will be made available to ZJ Advisory clients, will be priced at 5 cents per share.

Avalon also announced today it would launch a one-for-ten rights issue for existing shareholders, also priced at 5 cents per share, to raise $3 million.

The rights issue remains subject to prevailing market conditions and an underwriting agreement.

“In the current difficult financial market conditions, it is an extremely pleasing result for Avalon to obtain such a significant injection of funds and to be fully funded through to the completion of the Viscaria BFS,” managing director Jeremy Read said.

Avalon said the funds would be used to complete a bankable feasibility study at Viscaria, as well as to continue regional exploration in northern Sweden.

The Viscaria project, which is located 1,200 kilometres north of Stockholm, has a global resource of 49.2 million tonnes of copper mineralisation, containing 544,000 tonnes of copper.

Avalon has recently released a string of strong drilling results at Viscaria, as well as appointing a new chairman in UK-based executive Crispin Henderson.

A scoping study released last week indicated a potential net present value of its base case open pit mining scenario for Viscaria of $US97 million, based on a $US3.25 per pound copper price and a $US150 per tonne magnetite concentrate price.

At 9:40AM, WST, Avalon shares were steady at 6 cents, having just resumed trading from a halt entered early last week.