Energia places $6m to Gorno, changes board

Exploration firm Energia Minerals says it has received shareholder approval to place $6 million towards its flagship Gorno zinc project in Italy, with pre-development activities planned to begin within six weeks.

The placement will come out of an $8.15 million funding package provided by Euroz Securities and new investors in September.

Energia shareholders approved the initial $6 million placement of 240 million shares, valued at 2.5 cents per share, at a general meeting yesterday.

The shares will be offered to sophisticated and professional Euroz clients.

“These commitments include entities associated with prominent Perth-based resource investor Alexander Burns, who will become a cornerstone investor in Energia by subscribing for 100 million shares under the placement resulting in a post-placement shareholding of about 19.31 per cent,” Energia said in a statement.

The company also plans to undertake a rights issue to raise about $2.15 million, which will be underwritten by Euroz and sub-underwritten by Mr Burns and Energia managing director Kim Robinson.

Energia said the funding package would enable it to fast-track resource definition and conduct a feasibility study on the Gorno project.

It also has planned a $4.75 million exploration program at Gorno, which includes 355m of underground development and 4,000m of underground diamond drilling.

Meanwhile, Mr Burns has been appointed as executive chairman of Energia, assuming the placement receives shareholder approval.

The company’s current non-executive chairman Tony Iannello and non-executive director Ian Walker both stepped down from their positions at the close of the general meeting yesterday.

Mr Burns will be employed on a three-year fixed term with a base salary of $300,000 per annum.

“The completion of this transaction sees the introduction of a significant new cornerstone investor group, led by our new executive chairman, Alexander Burns, and the recapitalisation of Energia to pursue the evaluation, financing and development of what we see as a premier high-grade zinc project at Gorno,” Mr Robinson said.

“This project is poised to capitalise on the favourable supply/demand fundamentals for zinc as the market moves further into deficit with the imminent closure of several major zinc mines worldwide.”

Energia’s share price closed 7.7 per cent lower at 3.6 cents per share.