OD6 Metals’ Capital Raise Highlights Risks Ahead for Gulf Creek Drilling

Capital Raise to Accelerate Historic Copper Exploration

OD6 Metals Limited (ASX: OD6) has successfully completed a placement raising A$1.17 million to advance exploration at its Gulf Creek Copper Project in New South Wales. This injection of capital comes as the company prepares to commence drilling activities on a site that has seen minimal exploration since the 1960s.

The placement was strongly supported by professional and sophisticated investors, including participation from OD6’s own directors, who collectively subscribed for A$65,000 worth of shares. The funds will primarily support the Phase 1 drilling program targeting high-grade volcanogenic massive sulphide (VMS) structures identified through recent geophysical modelling.

Unlocking Potential at a Historically High-Grade Site

Gulf Creek was once considered one of the highest-grade copper mines in New South Wales, with historic grades ranging from 2% to 6.5% copper before its closure in 1912 due to low copper prices. OD6’s recent geophysical surveys have revealed multiple walk-up drill targets, suggesting the potential for extensional and repeat mineralisation zones along more than 3 kilometres of untested strike near the historic workings.

With over 10 kilometres of prospective tenement strike, the project offers significant greenfields and brownfields exploration upside. The company’s strategy involves a phased drilling approach, beginning with brownfield drilling around known mineralisation, followed by broader discovery exploration activities.

Strategic Use of Funds and Shareholder Engagement

The placement shares will be issued at 4.5 cents each, representing a modest discount to recent trading prices, and will be accompanied by free attaching options exercisable at 6.5 cents within three years, subject to shareholder approval. The company has been careful to balance the need for capital with shareholder dilution concerns, opting for a prudent raise that ensures sufficient runway to complete Phase 1 and initiate Phase 2 exploration activities.

Settlement of the placement is expected by mid-February, with a general meeting planned for mid-March to approve the issue of shares to directors and the attaching options. JP Equity Holdings Pty Ltd acted as sole lead manager and bookrunner, while Yelverton Capital Pty Ltd was engaged as corporate adviser, both receiving options as part of their fees.

Broader Portfolio and Future Outlook

Beyond Gulf Creek, OD6 Metals is also advancing rare earth element projects in Western Australia, including the Splinter Rock and Grass Patch projects. The company recently released a Mineral Resource Estimate for Splinter Rock, confirming it as Australia’s largest and highest-grade clay-hosted rare earth deposit, underscoring OD6’s diversified critical minerals focus.

As drilling at Gulf Creek is poised to commence imminently, the market will be watching closely for assay results that could validate the company’s exploration thesis and potentially unlock significant value from this historically rich copper district.