Barton Gold launches $3m share placement to accelerate Tunkillia resource upgrade drilling
Barton Gold Holdings (ASX: BGD) (OTCQB: BGDFF) has received firm commitments for a $3 million share placement to expedite resource upgrade drilling at its Tunkillia gold project in South Australia.
Barton will issue approximately 4.28 million shares at $0.70 each, representing a 4% premium to the company’s last traded price and a 25% premium to the one-month volume-weighted average price.
Australian precious metals-focused investment groups and sophisticated investors – including prominent resources industry veterans and several of Barton’s longest-serving investors – are supporting the placement, which will lift the company’s cash balance to $9m with a modest equity dilution of 1.93%.
Strong interest
Barton managing director Alexander Scanlon said the company had received strong interest in the raising.
“Over the past four years, we have issued less than $10m in new equity, with minimal shareholder dilution and we are now pleased to welcome several new high-quality investors, with support from some of our largest long-term holders,” he said.
“This premium placement follows exceptional performance on value-add initiatives, as we now accelerate our Stage 1 operation plans, our high-grade Tolmer gold and silver discoveries and our Stage 2 Tunkillia project.”
Mr Scanlon said the raising would leave Barton “very well-capitalised” to deliver high-value project milestones during the coming year.
Resource upgrade drilling
The company will use funds from the placement funds to accelerate resource upgrade drilling at Tunkillia’s high-value Stage 1 and Stage 2 ‘starter pits’ to support future conversion to ore reserve estimates.
The pits should produce a combined 365,000 ounces gold and 923,000oz silver during the first 27 months of production, generating between $956m and $1.3 billion in operating free cash flow.
Tunkillia’s current resource sits at 1.6 million ounces of gold with an inferred silver resource of 3.1Moz as a subset of the gold mineralisation.
Barton expects to start its Tunkillia drilling in September.