Spartan taps investors for $80m

Spartan Resources has announced it will raise $80 million to further accelerate exploration activities and development of its Dalgaranga gold project, located 475km north-east of Perth. 

The Simon Lawson-led gold miner told the market the fully underwritten capital raise would be comprised of an institutional placement and a 1 for 17 pro-rata accelerated non-renouncable entitlement offer.

This is Spartan's second significant fundraising exercise in the space of five months, with the West Perth-based company tapping investors for $25 million in November last year, after issuing 62.5 million shares at an offer price of 40 cents per share. 

As part of its placement, Spartan will issue around 81.2 million shares at an offer price of 58 cents - which represents an 11.5 per cent discount of Spartan's final closing price on April 17, raising $47 million.

The remaining $33 million will be generated via the 1 for 17 pro-rata accelerated non-renounceable entitlement offer, following the issue of approximately 56.8 million shares.

Cannacord Genuity, Euroz Hartleys and Sternship Advisers have been appointed joint managers and underwriters for the capital raise. 

Mr Lawson said Thursday's announcement was extremely significant for Spartan, which has multiple assets in Western Australia's Murchison region. 

“This is a landmark capital raising for Spartan which puts the company in an exceptional position to deliver on the huge potential of the Never Never discovery and our other recent exploration successes at Dalgaranga," he said.

“The proceeds will allow us to establish an underground exploration decline that will take underground development to within 50 to 100 metres of the Never Never orebody.

"This will allow us to cost effectively drill-out Never Never, the new Pepper discovery and Four Pillars to a very high level of definition, while also testing other ‘look-alike’ targets in the vicinity.

“Importantly, the underground exploration decline is also likely to provide for an accelerated pathway to re-commence mining at the time of a Final Investment Decision to re-start production.

"The Spartan team is committed to ensuring a thorough and diligent approach is taken to the delineation of the high-grade orebodies at Dalgaranga." 

Proceeds from the capital raise, coupled by existing cash reserves, will ensure $35 million is allocated towards exploration drilling and studies at Spartan's Never Never deposit and Pepper prospect, along with other nominated targets.

This follows on from Spartan allocating $40 million towards exploration costs, studies and maintenance costs during its raising exercise last November. 

A further $47 million has also been collectively allocated towards the underground exploration decline and site infrastructure early works - with development of the decline predicted to begin later this year. 

Spartan last traded at 65.5 cents per share.