Strickland Metals share price surged 21 per cent higher to 11 cents after the company bagged a $5 million cash injection from Chinese mining giant Zijin Mining to supercharge exploration at its 7.4-million-ounce Rogozna gold-copper juggernaut in Serbia.
The new funding has armed the Australian explorer with a beefed-up war chest to fast-track the company’s most aggressive drilling assault to date at Rogozna and as it works towards building its gold inventory at the project’s red-hot Gradina deposit.
When the deal settles Zijin will emerge with a 2.4 per cent stake in Strickland through a non-brokered placement of more than 54.9M shares at 9.1c each. The placement price carries no discount to the last traded price and has been set at a premium to the 5 and 10-day volume-weighted average prices.
Zijin Mining is one of the world’s largest mining companies and as a strategic shareholder it can bring plenty to the table for Strickland. Apart from operating major mines around the world, the Chinese-based company also has substantial copper-gold mines and development assets in Serbia.
Zijin has a market capitalisation of more than US$60 billion and has become a dominant force in Serbian mining. It operates the Čukaru Peki and Bor copper-gold mines, which together hold a staggering 34 million tonnes of copper and 29 million ounces of gold. Last year alone, the duo churned out 300,000 tonnes of copper and 250,000 ounces of gold.
Strickland Metals managing director Paul L’Herpiniere said: “While Strickland was not seeking to raise equity capital at current share prices, the significant benefits of bringing Zijin onto the Strickland share register far outweigh the small dilutionary impact of this strategic placement. Their investment is a strong endorsement of the quality of the 7.4M-ounce AuEq1 Rogozna project in Serbia and the significant progress being made towards our goal of developing a world-class gold-copper operation.”
The Rogozna project has rapidly grown into a multi-deposit with a current resource of 7.4M ounces of gold equivalent across a suite of prospects including Shanac, Medenovac and Copper Canyon.
With gold prices soaring to new all-time highs of $5269 per ounce overnight, the company’s gold-only Gradina deposit is taking centre stage as the company fast-tracks a maiden resource.
Earlier in the week, Strickland brought in a sixth drill rig to smash out 20,000 metres of diamond drilling at Gradina, focussing on a shallow, high-priority up-dip zone towards surface.
An earlier drilling blitz lit up with cores bearing multiple high-grade gold hits across three distinct lodes. Highlights included a cracking 14.3m at 8 grams per tonne (g/t) gold from 517m, featuring a 2m section of 17.6g/t, and several wide zones such as 12m at 3.6g/t gold and 6m at 5.7g/t gold.
One lode was tracked four times up-dip from 603m to as shallow as 150m, where a 48.5m intercept at 3.1g/t gold hinted at a flattening gold seam angling 40 degrees to surface.
With mineralisation trending right up a gold-rich ridge, management says the find could be a game-changer, potentially opening the door to a low-cost, horizontal adit from the west.
Strickland now has the six diamond rigs spinning across the broader project area and plans to throw the new funds at about 50,000m of additional drilling planned for the year. Key priorities include delivering a maiden resource at Gradina, further resource expansion across the broader project area and pushing on with scoping work for development at the project.
Zijin’s vote of confidence also helps shore up Strickland’s balance sheet ahead of another big year at its Yandal gold project in Western Australia, which holds a JORC resource of more than 400,000 ounces.
Strickland says Yandal continues to be a valuable piece of the company’s portfolio and the placement funds will support ongoing exploration across both assets, as well as general working capital.
With drills whirring, resources growing and heavyweight backing in its corner, Strickland’s Serbian gold-copper play is heating up – and this latest deal could mark the start of something very special.
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By James Pearson
