Musgrave Minerals (ASX:MGV) has received firm commitments of A$8 million via a strongly supported placement to institutional and sophisticated investors.
The company is also undertaking a share purchase plan targeting A$2 million offered to shareholders at the same price as the placement.
This will boost Musgrave’s cash reserves to A$15 million, meaning the company will be well funded to continue exploration, resource growth efforts and development activities at its Cue Gold Project.
Use of funds
In conjunction with existing cash reserves, the funds raised through the Capital Raising are indicatively proposed to be used as follows:
• Completion of the Stage 1 PFS which will focus on the technical and financial viability of the initial years of the Cue Gold Project;
• Completion and submittal of a mining proposal for the Cue Gold Project;
• Further development works;
• Completion of a RC/diamond drilling programme of ~30,000m to test multiple high-priority
targets identified on the Cue Gold Project (including resource definition drilling of the new Waratah and Amarillo gold discoveries) in light of the results from regional exploration drilling which continues to identify new mineralised zones;
• Continue to progress resource drilling to aim to advance conversion of Inferred Resources to the higher confidence Indicated category;
• Regional exploration focused on identifying and drill testing additional high-priority targets to pursue further growth of the resource base; and
• General working capital requirements, costs relating to the Capital Raising and contingent corporate purposes.
“The progression of development studies, a systematic de-risking of the project and pursuing resource growth can ensure we unlock the inherent value of the project as a strategic asset and create value for shareholders,” Managing Director Rob Waugh said.
“I’d like to welcome the new investors to the company and we are pleased to offer existing eligible shareholders an opportunity to participate through the SPP at the same price as the Placement.”
Mr Waugh said Musgrave’s Cue Gold Project represents a unique, high-quality asset with the cornerstone being the high-grade, near-surface Break of Day Trend deposits that will underpin our development studies. Further success in regional exploration has the potential to advance the scope of the project through further discovery and resource growth.
Following the completion of the Capital Raising, the Company will have a cash balance of approximately A$15 million.
Share Purchase Plan (SPP)
In addition to the Placement, the company is pleased to announce an SPP targeting to raise A$2 million, under which existing Musgrave shareholders who are eligible, will be given the opportunity to acquire shares up to a maximum value of $30,000 at the same issue price as New Shares issued under the Placement, being $0.20 per New Share. The company reserves the right to accept oversubscriptions and/or scale back applications. The SPP is not underwritten.
The company intends to raise A$2 million from the SPP. However, if total demand for the SPP exceeds A$2 million, the Directors may in their absolute discretion, undertake a scale back to the extent and in the manner they see fit or close the SPP early. Alternatively, the company may elect to accept over subscriptions in excess of A$2 million, subject to the maximum permitted under the ASX Listing Rules. The company may also alter the offer period for the SPP.
For further information please visit: https://musgraveminerals.com.au/