Capital Raise Puts Pressure on Southern Cross Gold to Deliver on Sunday Creek Promises

Capital Raise Overview

Southern Cross Gold Consolidated (ASX: SX2, TSXV: SXGC) has announced a significant capital raise through a private placement targeting approximately C$120 million. The placement involves issuing 26,666,667 common shares and/or Depositary Interests (CDIs) priced at C$4.50 and A$5.10 respectively, representing discounts of around 4-9% to recent trading prices on the TSXV and ASX. This strategic move is designed to strengthen the company’s financial position and accelerate development activities at its flagship Sunday Creek Gold-Antimony Project in Victoria, Australia.

Use of Proceeds and Project Advancement

The proceeds from the placement will be allocated to several critical areas: approximately C$53 million will fund a 207-kilometer drilling program aimed at expanding the inferred and indicated resource base by 2027. Another C$27 million is earmarked for decline development to improve access to mineralization and accelerate permitting processes. Additionally, C$4 million will support a preliminary economic assessment, while C$36 million is allocated for ongoing exploration, working capital, and general administrative expenses over the next two years. This comprehensive funding plan underscores Southern Cross Gold’s commitment to advancing Sunday Creek towards production readiness.

Placement Structure and Management

The placement is being led by Nicolaus Aitken Capital Partners Ltd and Stifel Canada, with Mount Capital Pty Ltd and Jett Advisors acting as joint managers and bookrunners. The securities issued will rank equally with existing shares and CDIs, ensuring no dilution of shareholder rights beyond the capital increase. While most securities will be issued without the need for shareholder approval, those subscribed by officers and directors will require consent at the company’s next annual general meeting, anticipated in November 2025.

Regulatory and Market Considerations

The placement is subject to customary regulatory approvals, including from the TSXV and ASX, and is being conducted under exemptions applicable to sophisticated and professional investors in Canada and Australia. Southern Cross Gold has requested a trading halt on its securities pending the announcement of placement results, reflecting the material nature of the capital raise. The company also disclosed commissions payable to agents and finders, consistent with market practice for transactions of this scale.

Strategic Implications

Sunday Creek is positioned as one of the world’s most significant gold-antimony discoveries, with a dual-metal profile that enhances its strategic value amid rising demand for antimony in defense and semiconductor applications. The capital raise not only provides the financial firepower to advance the project’s development but also signals Southern Cross Gold’s intent to solidify its role as a key supplier in a critical minerals landscape shaped by geopolitical and supply chain considerations.