Australian-based minerals company Avalon Minerals is set to raise $3.88 million through a share placement with copper producer, developer, and explorer Mawson West.
The funds raised will be used to advance Avalon’s Viscaria feasibility study and to explore its extensive regional tenement holding in northern Sweden.
The raising consists of two tranches and is subject to completion of due diligence by Mawson West, expected to be completed by December 31, 2011.
The first tranche consists of approximately 35.8 million shares at 6.5 cents per share, raising $2.33 million, and will be completed within Avalon’s 15 per cent placement capacity under ASX rules.
Following the completion of this tranche, Avalon and Mawson West will partake in a strategic alliance to assist Avalon in the development of its projects. A nominated person from Mawson West will also be appointed by Avalon to serve as a director.
The second tranche consists of approximately 23.8 million shares at 6.5 cents per share, which is subject to approval by Avalon shareholders.
If approved, Mawson West will be entitled to 19.9 per cent of Avalon’s total issued capital once the capital raising is completed.
Avalon’s chairman David McSweeney said: “The proposed cornerstone investment by producing copper company, Mawson West combined with the strategic alliance will assist Avalon to achieve its goals of developing the Viscaria copper project and exploring for further copper and iron ore deposits in northern Sweden.
“We look forward to finanlising the transaction and to working with the experienced team at Mawson West.”
Avalon opened for trading today after being held in a trading halt since Thursday. Its shares are currently trading at seven cents.