Magnetic taps investors for $10m

Magnetic Resources is hoping recent success at its Lady Julie gold project in Laverton can continue, after announcing plans to raise $10 million.

George Sakalidis-led Magnetic, a mid-cap explorer, told the market it would predominantly use proceeds from the capital raise to undertake a variety of drilling activities, coupled with ongoing feasibility-related work.

This is the West Perth-based company's second Lady Julie-focused raise in the space of six months, after tapping investors for $12 million in March. 

Monday’s news follows Magnetic’s revised economic update of Lady Julie, located 17km south-west of Laverton, in August – with the predicted overall gold production at the site rising to 817,400 ounces.

This was up from the company’s overall gold recovery production figure of 720,800oz in March.  

Under the single tranche placement, Magnetic said it would issue around eight million new fully paid shares at an issue price of $1.25 per share.

The issue price represents an 8.4 per cent discount to Magnetic’s closing price of $1.36 on September 25 before entering its trading halt – along with a 9.2 per cent discount to its five-day volume weighted average price.

Argonaut Securities acted sole lead manager to the placement.

"The Lady Julie gold project in Laverton continues to expand in size, and with an increasing gold price, the company continues to be excited by the potential for a financially robust low-cost, high margin gold production," Mr Sakalidis said.

Magnetic last traded at $1.30 per share, down 4 per cent, as of 10.56am WST.