Flagship Minerals Raises $1.25M to Convert Pantanillo Gold Resource

Funding the Next Phase

Flagship Minerals Limited (ASX: FLG) has successfully completed a A$1.25 million capital raise, combining fresh equity from new and existing investors with the conversion of March 2024 Convertible Notes. This strategic funding round is designed to balance the company’s cash needs with advancing its flagship asset, the Pantanillo Gold Project in Chile.

The placement was priced at $0.06 per share, representing a 14% discount to the recent closing price, and included the issuance of options exercisable at $0.12 within two years, subject to shareholder approval. Notably, company management, including Managing Director Paul Lock, participated via conversion of director loans, signaling internal confidence in the project’s potential.

Advancing Pantanillo Towards JORC Compliance

The primary objective for the newly raised funds is to convert and possibly expand the existing qualifying foreign estimate of 47.4 million tonnes at 0.69 grams per tonne gold, equating to approximately 1.05 million ounces. This estimate, compliant with Canadian NI 43-101 standards, currently lacks JORC certification, which is essential for Australian market reporting and investor confidence.

Flagship plans to undertake extensive work including core logging, re-assaying, updating metallurgical testwork, and initiating environmental studies. These efforts aim to validate and upgrade the resource to meet the 2012 and forthcoming 2025 JORC Code standards, bringing the project closer to feasibility and production readiness. The Pantanillo deposit’s amenability to open-pit mining and heap leach processing positions it as a potentially significant gold inventory for the company.

Broader Project Development and Market Context

Beyond Pantanillo, Flagship is also preparing for trenching and initial metallurgical testwork at its Rosario Copper Project, laying groundwork for a drilling campaign post-Pantanillo activities. The company has been cautious with capital management over the past 18 months, mindful of market conditions and dilution risks at its current valuation, which the board believes undervalues its asset base relative to peers.

The conversion of convertible notes and management’s direct participation in the placement reflect strong internal and investor support. Joint lead arrangers GBA Capital and Novus Capital facilitated the placement, with fees structured to exclude conversions and management participation, aligning incentives.

Technical Foundations and Next Steps

The qualifying foreign estimate is based on extensive historical drilling and technical studies conducted by previous operators, including Anglo American and Kinross Gold. Flagship’s planned verification work will include validation of drillhole data, QA/QC of assays, and additional diamond drilling to confirm geological models and metallurgical characteristics.

Environmental assessments and permitting processes are also underway, critical for advancing towards mining approvals. The company anticipates that these comprehensive studies will take approximately two years to complete, with the current placement funding the initial phase.