PNX Metals Ltd (ASX:PNX) has received $1.1 million from the exercise of 74 million options with an exercise price of 1.5 cents by cornerstone investor and existing substantial shareholder DELPHI Unternehmensberatung Aktiengesellschaft.
The company has also signed subscription agreements with sophisticated investor shareholders to raise a further $0.5 million before costs via the placement of about 33.3 million ordinary shares, also at a price of 1.5 cents per share.
Managing director James Fox said “We are very pleased to have received $1.6 million on the back of releasing excellent high-grade gold assay results from the Fountain Head gold Project.
“The significant underlying value in our NT assets and potential value in developing the Fountain Head gold Project is recognised by our major shareholders and the exercise of options and placement at a significant premium to market demonstrates their strong support for the company’s near-term development strategy which aims to generate early cashflow from the project and transition PNX to a producing gold company.”
The issue of placement shares (33.3 million shares for $0.5 million) will be undertaken without shareholder approval utilising the company’s existing capacity under ASX Listing Rule 7.1 with completion of the placement scheduled for 20 March 2020.
The funds will be used to significantly advance feasibility studies and approvals for a heap leach operation as a low-cost, scalable option for generating early cashflow from the Fountain Head gold project
Heap leaching potential
Successful gold heap leaching at Fountain Head could also lead to the development of other gold deposits in the region, many of which lie within PNX’s project areas.
Some of these deposits are currently considered 'stranded' due to their modest grades and distance from existing processing infrastructure.
Feasibility and technical studies relating to project approvals are ongoing, with the submission of an environmental impact statement expected in late April.
Recent drilling results
The company recently released excellent near-surface gold assay results from drilling at the Fountain Head gold Project
New zones of broad, high-grade gold mineralisation near surface in the area between the Fountain Head and Tally Ho mineral lodes over a strike extent of approximately 100m, include 14 metres at 9.22 g/t from 17 metres.
This area, historically known as ‘Ladder-Vein west’, material previously classified as waste or low-grade ore is being assessed as hosting grades that will potentially support early mining and an increase in gold resources.
PNX’s long-term aim is to evolve Fountain Head into a regional processing hub capable of monetising a pipeline of gold and base metals assets.