Asara Resources has raised $25 million through a well-supported institutional placement to accelerate exploration at its promising Kada Gold Project in Guinea. The capital injection aims to expand drilling and resource growth over the next 12-18 months.
- Raised $25 million via two-tranche institutional placement at $0.05 per share
- Strong demand from existing and new Australian and international investors
- Funds targeted for expanded drilling and exploration at Kada Gold Project
- Second tranche subject to shareholder approval at mid-September EGM
- Focus on growing mineral resource and upgrading exploration infrastructure
Capital Raise to Accelerate Exploration
Asara Resources Limited (ASX, AS1) has successfully secured $25 million through a two-tranche institutional placement, marking a significant step forward in its strategy to advance the Kada Gold Project in Guinea. The placement, priced at $0.05 per share, attracted strong support from both existing institutional shareholders and new investors from Australia and overseas, signaling confidence in Asara’s exploration potential and management team.
Strategic Use of Funds
The proceeds will primarily fund an expanded exploration program at Kada, including resource extension and infill drilling at the Massan deposit, as well as reconnaissance drilling on newly acquired Talico and Banan licenses. Additional activities such as mapping, trenching, geophysics, and upgrades to the exploration camp are also planned. This comprehensive approach aims to significantly increase the current mineral resource estimate, which stands at approximately 923,000 ounces of gold within 30.3 million tonnes at 1.0 grams per tonne.
Placement Structure and Shareholder Engagement
The placement consists of two tranches, the first tranche of approximately $13.76 million will be completed under the company’s existing placement capacity, with settlement expected in early August. The second tranche, raising about $11.24 million, is subject to shareholder approval at an Extraordinary General Meeting anticipated in mid-September. This staged approach balances immediate funding needs with governance and shareholder engagement.
Market and Project Outlook
CEO Matthew Sharples expressed optimism about the capital raise, highlighting the strong institutional demand as a vote of confidence in both the Kada project’s growth potential and Asara’s systematic exploration strategy. Guinea remains one of West Africa’s most under-explored gold regions, and Asara’s extensive land package offers considerable upside for new discoveries. The company’s focus over the next 12 to 18 months will be on delivering exploration results that could materially enhance the project’s value.
Broader Portfolio and Strategic Focus
While Asara also holds copper and silver-lead-zinc projects in Chile, including the Paguanta and Loreto projects, the company is prioritizing the Kada Gold Project as its flagship asset. Plans to divest non-core assets underscore a sharpened focus on gold exploration in Guinea, where the potential for resource expansion remains significant.
Bottom Line?
Asara’s $25 million raise sets the stage for a pivotal exploration phase at Kada, with upcoming drilling results poised to shape investor sentiment.
Questions in the middle?
- Will shareholder approval for the second tranche proceed smoothly at the mid-September EGM?
- How quickly can Asara translate exploration results into a meaningful resource upgrade?
- What impact will expanded drilling have on the project’s timeline towards potential development?