Medallion Metals Limited has secured $6.5 million through a placement to support its strategic acquisition of Forrestania Nickel Operation assets and advance the Ravensthorpe Gold Project, positioning the company for a final investment decision by late 2025.
- Placement raises $6.5 million at 10 cents per share
- Pro-forma liquidity to reach approximately $9.5 million post-settlement
- Funds to support acquisition of Forrestania Nickel Operation assets including Cosmic Boy Process Plant
- Strong institutional backing including Alkane Resources and new investor Lion Selection Group
- Scoping Study confirms robust economics for sulphide development strategy with gold and copper production
Capital Raising to Fund Strategic Acquisition
Medallion Metals Limited (ASX:MM8) has successfully raised $6.5 million through a single tranche placement priced at 10 cents per share, representing a modest discount to recent trading prices. This capital injection is designed to bolster the company’s balance sheet as it advances negotiations to acquire key assets of the Forrestania Nickel Operation (FNO), notably the Cosmic Boy Process Plant and associated infrastructure.
With the placement proceeds, Medallion expects its pro-forma cash position to reach approximately $9.5 million before costs, providing the financial flexibility to undertake pre-development activities, secure long lead-time equipment, and support general working capital needs.
Institutional Support Validates Strategy
The placement was strongly supported by a mix of new and existing institutional investors, including Alkane Resources Limited (ASX:ALK), which will become a substantial shareholder holding 6.3% post-settlement. Other notable participants include Lowell Resources Fund and newcomer Lion Selection Group, both recognized for their track records in backing junior resource companies. This broad institutional endorsement underscores confidence in Medallion’s management and its strategic direction toward rapid gold and copper production.
Advancing the Forrestania Opportunity
Medallion is currently in exclusive discussions with IGO Limited (ASX:IGO) regarding the acquisition of FNO assets. The Cosmic Boy Process Plant, a sulphide flotation facility, is well suited to process the gold-copper bearing sulphide mineralisation from Medallion’s Ravensthorpe Gold Project (RGP). The integration of RGP’s mineral resources with Forrestania’s infrastructure offers a capital-light and expedited pathway to production.
Supporting this strategy, a recently completed Scoping Study highlights the project’s robust economics, projecting a mine life of 5.5 years with average pre-tax cash flows of $90 million per annum under base case assumptions. The study forecasts a pre-tax net present value (NPV10) of $329 million and an internal rate of return (IRR) of 129%, with a rapid payback period of just 12 months. These figures improve further under spot commodity price scenarios.
Ongoing Development and Future Milestones
Medallion continues to advance infill drilling, metallurgical test work, and permitting activities at the Ravensthorpe Gold Project, with a 15,000-metre drilling program expected to conclude in April. Results will feed into an updated Mineral Resource Estimate and a Bankable Feasibility Study (BFS), targeted for completion ahead of the final investment decision (FID) planned for late 2025.
Meanwhile, the company remains alert to opportunities to accelerate development timelines, including undertaking certain pre-development works and securing long lead-time items as negotiations with IGO progress. The placement proceeds provide the necessary financial headroom to act swiftly on these initiatives when deemed appropriate by the board.
Strategic Outlook
Medallion’s approach leverages proven processing technology and a well-established mining region, with the Forrestania greenstone belt historically producing significant gold volumes. The company’s sulphide development strategy aims to unlock substantial value by combining existing mineral resources with operational infrastructure, positioning Medallion as a potential near-term gold and copper producer in Western Australia.
Bottom Line?
Medallion’s $6.5 million placement sets the stage for a pivotal acquisition and a potential production leap by late 2025.
Questions in the middle?
- Will Medallion secure binding terms to acquire Forrestania assets from IGO?
- How will ongoing drilling results impact the updated Mineral Resource Estimate and BFS?
- Can Medallion accelerate the development timeline beyond the targeted late 2025 final investment decision?