Vertex Minerals Raises A$11m to Kickstart High-Grade Underground Gold Mining
Vertex Minerals has raised approximately A$11 million to accelerate underground mining at its high-grade Hill End Gold Project, targeting production by July 2025. The capital raising includes a share placement, convertible loan, and a Share Purchase Plan, positioning the company for strong margins amid a robust gold price environment.
- A$11 million capital raising via share placement and convertible loan
- Funds to accelerate underground development and start mining by July 2025
- High-grade Hill End resource with 16.7g/t gold and 225,200 ounces
- Shareholder approval sought at mid-June EGM for placement and loan conversion
- Attaching options offered with new shares at a discount to recent prices
Capital Raising to Propel Underground Mining
Vertex Minerals Limited (ASX: VTX) has announced a conditional capital raising of approximately A$11 million, designed to fast-track the commencement of underground mining at its Hill End Gold Project in New South Wales. The raise comprises a A$7.5 million share placement, a A$3.5 million convertible loan, and a Share Purchase Plan (SPP) targeting up to A$1 million. This injection of capital is earmarked to complete remaining capital expenditure and provide working capital ahead of mining operations slated to begin by July 2025.
High-Grade Resource and Cost-Efficient Production
Hill End boasts a robust mineral resource estimate of 419,000 tonnes at an impressive 16.7 grams per tonne gold, equating to 225,200 ounces. The project's pre-feasibility study, completed earlier this year, projects production of up to 30,000 ounces annually at an all-in sustaining cost below A$2,000 per ounce. This positions Vertex to generate attractive margins, especially given the prevailing strong gold price environment. The company’s adoption of mechanised underground mining and advanced ore sorting technology further supports its low-cost production ambitions.
Innovative Processing and ESG Credentials
Vertex has recently commissioned a Tomra ore sorter and gravity gold plant at Hill End, enabling efficient separation of high-grade quartz-hosted gold ore from waste rock. This technology reduces processing costs and environmental impact by minimizing grinding requirements and eliminating the use of chemicals such as cyanide. The company highlights its commitment to sustainability, citing low water usage, benign tailings, and a compact, fully approved site footprint as key environmental advantages.
Shareholder Engagement and Market Positioning
The capital raising has attracted strong demand from existing shareholders, including a cornerstone order of approximately A$4 million, alongside new investors. The new shares are priced at a discount of around 12% to recent trading prices, with attaching options sweetening the offer. Shareholder approval for the placement and conversion of the convertible loan will be sought at an Extraordinary General Meeting scheduled for mid-June 2025. The company anticipates that the funds will provide sufficient liquidity to complete underground development and transition to production smoothly.
Looking Ahead
With over A$25 million already invested by previous owners in underground development and processing infrastructure, Vertex is poised to become one of Australia’s next high-grade gold producers. Executive Chairman Roger Jackson expressed optimism about the project’s cash generation potential and ESG credentials, underscoring the company’s readiness to capitalize on its unique resource and technological advantages.
Bottom Line?
Vertex’s successful capital raise sets the stage for a pivotal production phase, but market watchers will keenly observe shareholder approval outcomes and operational execution in the months ahead.
Questions in the middle?
- Will shareholder approval be secured smoothly at the mid-June EGM?
- How will the market react to the dilution and discounted pricing of new shares?
- What are the prospects for expanding the resource or extending mine life beyond initial production?
