Alto Metals Ltd (ASX:AME) has raised $5.5 million in a strongly supported placement to accelerate an aggressive exploration program testing potential repeat lodes at the flagship Sandstone Gold Project in Western Australia.
The placement was well supported by existing major shareholders along with a number of new, resource-focused institutional and sophisticated investors.
Firm commitments received for the placement at 7.5 cents a share exceeded the offer size, providing validation of the company’s strategy.
Proceeds will be used to fund planned exploration and drilling at Lord Nelson and the Lords’ Corridor as well as several regional targets at Sandstone Gold Project.
Alto’s managing director Matthew Bowles said: “We are extremely pleased with the overwhelming interest in the placement to existing and new investors, including a number of resource-focused institutional investors, which is a strong endorsement of the potential of our Sandstone Gold Project.
“The proceeds will allow Alto to undertake an extensive 30,000-metre RC drilling program, focused on testing extensions of known gold mineralisation at Lord Nelson and the new Orion lode discovery, in addition to a number of potential repeat lodes and along the 3-kilometre Lords’ corridor.
“I would like to thank everyone who participated in the placement for their support and welcome our new shareholders to the register as we look forward to our next exciting phase of drilling due to commence next week.”
Alto plans to accelerate exploration at Sandstone by initiating a 5,000-metre wide-spaced reverse circulation (RC) drilling program that will start next week to test multiple potential Lord Nelson repeats along the Lords’ Corridor and high-grade gold mineralisation beneath Lord Nelson pit and the Orion Lode.
The company is also planning 30,000 metres of RC drilling to test the entire 3-kilometre Lords’ Corridor and several regional targets within the 800 square kilometres Sandstone project.
Alto plans to issue approximately 74.4 million shares at 7.5 cents per share to institutional, sophisticated and professional investors.
This offer is at an 11.8% discount to Alto’s last trading price of 8.5 cents per share on Wednesday, September 16, 2020, the day ASX granted a trading halt as the company was planning and executing the capital raising initiative.
Alto also intends to seek shareholders’ approval to raise a further $900,000 through a placement to directors, including major shareholder Windsong Valley, on the same terms as the placement issue.
Morgans Corporate Limited acted as lead manager to the placement.