AuMEGA Metals Ltd has secured an additional C$16.3 million in an upsized private placement, having received subscriptions from global institutional investors as well as existing shareholders such as B2Gold (NYSE:BTG) Corp, which increased its ownership stake to 9.9%.
Given the heavy demand AuMEGA received for the placement, the company has opted to structure the capital raise in two tranches, with the second being subject to shareholder approval.
The proceeds will be used for exploration programs on AuMEGA’s Newfoundland and Labrador-based projects in Canada as well as working capital purposes.
Validation of gold exploration strategy
AuMEGA Metals managing director and CEO Sam Pazuki said the placement had received overwhelming support from existing shareholders and major, institutional and global shareholders.
“This support validates the AuMEGA value proposition that includes the sheer scale of our land package on a highly prospective yet vastly underexplored gold structure that already hosts the company’s mineral resources and Calibre’s multi-million-ounce mineral resources.
“It supports our systematic approach to exploration which we believe is the right way to explore a structure that is mostly under glacial overburden and has limited historical work.
“It is a vote of confidence in our incredible team who are tasked with finding the next major mineral deposit in Newfoundland and Labrador, Canada.”
AuMEGA’s Cape Ray Shear Zone tenements host dozens of targets the company considers high potential, alongside an existing gold mineral resource of 6.1 million tonnes at 2.25 g/t gold for 450,000 ounces of gold in the indicated category.
The Cape Ray Shear Zone portfolio also holds an inferred resource of 3.4 million tonnes at 1.44 g/t gold for 160,000 ounces of gold for a total of 610,000 ounces.
Greenfield exploration paying dividends
“We have invested the last two plus years on mostly early-stage, reconnaissance-style exploration primarily within the greenfields,” Pazuki continued.
“We have advanced several targets forward during this time and have gained an enhanced understanding of the geology of the Cape Ray-Valentine Lake Shear Zone.
“Through this work, we have identified several areas of interest that we believe could host the next major deposit.”
Pazuki says the company’s exploration, funded by its shareholders, led directly to identifying promising opportunities like Bunker Hill, which includes some of the highest gold, copper and silver values anywhere in AAM’s portfolio.
“It has remarkable geological structures with the key characteristics that we would want when exploring for large mineral systems,” he explained.
"Specific plans" to come
“We have been planning our 2025 program over the past several weeks and over the course of the next few weeks, we will announce our specific plans which will include the largest drill program the company has invested in since 2021.
“Our focus will be on discovery at Bunker Hill while seeking to expand our mineral resources within the resource corridor.
“We look forward to advancing our programs in systematic ways by making the right decisions all with a mindset of having the next major deposit in Newfoundland.”
AuMEGA intends to conduct the placement in two tranches:
- Tranche one - Just over 78.8 million shares under ASX listing rule 7.1 and about 52.3 million shares under ASX listing rule 7.1A for a total of 131 million.
- Tranche two - 131 million shares subscribed above the placement capacity – this tranche requires shareholder approval, expected in the first week of December.
Approximately 262.5 million shares will be issued at an average price of C$0.062 (A$0.067) per share.
AuMEGA will use the funding to conduct its largest drilling program in three years at Bunker Hill, which will target resource growth with 20,000 metres of drilling.