Argonaut Resources NL (ASX:ARE) is overwhelmed by the response to its share purchase plan which has closed early and more than twice oversubscribed with the target subsequently increased to $2.5 million from $1.2 million.
By late Friday the company had received subscriptions in excess of $3 million and as a result, the SPP was closed with immediate effect.
Pro-rata scale back
Along with increasing the SPP target size, the board decided to undertake a pro-rata scale back in respect of the balance amount over-subscribed.
Any excess application monies without interest will be refunded to those whose applications are affected by the scale-back.
Director and CEO Lindsay Owler said the board was pleased by the strong shareholder support and thanked those who contributed to the SPP.
Use of funds
Money raised under this SPP and from the recently completed $2.7 million share placement will be used to:
- Drill test copper targets at the 100%-held Murdie Project in South Australia. The copper targets at Murdie are gravity anomalies in the style of BHP’s high-grade Oak Dam discovery, 45 kilometres to the northwest;
- Complete a scoping economic study of the Nyungu copper-cobalt deposit at Lumwana West in Northwestern Zambia; and
- For working capital.
“Exciting stage in price cycle”
Owler said: "Funds raised will be applied to copper exploration and development during an exciting stage in the copper price cycle.
"Argonaut is preparing to drill several deep holes into gravity targets at the 100% held Murdie copper project in South Australia, nearby to BHP’s spectacular Oak Dam discovery and Oz Mineral’s newly commissioned Carrapateena copper mine.”
"Additionally, Argonaut has restarted scoping metallurgical test-work on its 90% held Nyungu copper-cobalt deposit at Lumwana West in north-western Zambia,” Owler said.
"Work commencing in 2020 includes leach test-work and oxidation test-work which will be followed by solvent extraction/electro-winning tests.
"Test results will provide data for a scoping economic study which will consider three different processing routes for Nyungu copper-cobalt mineralisation.
"The company is excited about its impending exploration and feasibility work, particularly given the strong potential for results to drive the company’s share price during this rising copper market."
Additional funds raised from the larger than expected SPP uptake will be used to provide greater financial flexibility to fast-track work on these projects.