Ausgold Limited has raised A$35 million through a well-supported placement to accelerate its Katanning Gold Project in Western Australia towards a final investment decision.
- A$35 million raised via placement at $0.57 per share
- Strong backing from new and existing institutional investors
- Funds earmarked for project acceleration and exploration
- Directors to subscribe additional $150,000 subject to approval
- Dundee Corporation commits A$2 million pending regulatory clearance
Ausgold's Capital Raise – A Strategic Boost
Ausgold Limited (ASX – AUC) has successfully secured binding commitments to raise A$35 million through a placement of approximately 61.4 million new shares priced at $0.57 each. This capital injection comes on the heels of the company’s recent completion of a Definitive Feasibility Study for its Katanning Gold Project (KGP) in Western Australia, marking a pivotal step towards becoming a mid-tier gold producer.
The placement attracted strong support from a mix of offshore and domestic institutional investors, alongside existing shareholders, signaling robust market confidence in Ausgold’s growth trajectory. Notably, Dundee Corporation has committed A$2 million, which, pending approval under the Foreign Acquisitions and Takeovers Act, would give it just over a 10% stake in the company.
Purpose and Priorities for the Funds
The proceeds from the placement are earmarked to accelerate the KGP’s development towards a final investment decision. This includes enabling the purchase of long lead-time equipment, acquiring freehold land, some of which is currently under option, and funding exploration drilling on high-priority near-mine and regional targets. Additionally, the capital will provide flexibility for deposits on critical items and support general working capital needs.
Directors have also committed to subscribing for an additional $150,000 of shares, subject to shareholder approval, underscoring their confidence in the project’s potential. Settlement of the placement is expected around mid-July 2025, with shares trading shortly thereafter.
Leadership Perspective and Market Implications
Executive Chairman John Dorward highlighted the significance of this milestone, noting the on-time and on-budget completion of the feasibility study as a major achievement. He emphasized that the fresh capital positions Ausgold well to expedite development and continue exploration across its extensive tenement holdings.
The 7.3% discount to the last traded share price reflects a balanced approach to attracting investment while maintaining shareholder value. The involvement of reputable financial advisers and joint lead managers, including SCP Resource Finance LP and Euroz Hartleys Limited, further adds credibility to the transaction.
As Ausgold advances towards a final investment decision, the market will be watching closely for progress updates and how effectively the company leverages this capital to unlock value from the Katanning Gold Project.
Bottom Line?
Ausgold’s $35 million raise sets the stage for a critical phase in its gold project journey, with investor confidence and regulatory approvals now in focus.
Questions in the middle?
- Will Dundee Corporation’s investment receive timely regulatory approval?
- How soon can Ausgold translate this capital into tangible project milestones?
- What impact will the placement have on Ausgold’s share price and investor sentiment?