Sky Metals Raises $6.1M at 6.5c to Fund Tin Resource Expansion
Sky Metals Limited has locked in $6.1 million through a share placement to accelerate exploration and development at its flagship Tallebung Tin Project in NSW. The funding will support resource expansion, metallurgical studies, and feasibility work.
- Binding commitments to raise $6.1 million at $0.065 per share
- Directors and management committed $592k, pending shareholder approval
- Strong institutional and existing shareholder demand
- Funds earmarked for resource drilling, bulk sampling, and mining studies
- Placement shares issued at discounts to recent trading prices
Funding Boost for Tallebung Tin Project
Sky Metals Limited (ASX, SKY) has announced a significant capital raise of $6.1 million through a share placement priced at 6.5 cents per share. This injection of funds is aimed at advancing the company’s 100%-owned Tallebung Tin Project, located in central New South Wales, a site with a rich history of tin mining dating back to the 1890s.
The placement will be executed in two tranches, an initial $5.5 million under existing placement capacity, followed by a $592,000 tranche subscribed by the company’s directors and management, subject to shareholder approval. The strong uptake from both institutional investors and existing shareholders underscores confidence in the project’s potential and Sky Metals’ strategic direction.
Strategic Use of Proceeds
The funds raised will be directed towards several key development activities at Tallebung. These include resource expansion drilling to explore extensions of recently discovered higher-grade tin and silver zones, bulk sampling and metallurgical testwork to optimise ore sorting and concentrate production, and advancing mining feasibility studies. The project’s shallow open-pit deposits and favourable ore characteristics position it well for low-cost tin production, which is increasingly critical given tin’s role in semiconductors, electronics, and solar technologies.
Managing Director Oliver Davies expressed gratitude for the strong support from shareholders and new institutional investors, highlighting the company’s conviction in Tallebung’s near-term prospects. The participation of directors and management in the placement further signals internal confidence in the project’s trajectory.
Market Context and Share Placement Details
The placement shares are being issued at an 8.5% discount to the last closing price and larger discounts to recent volume-weighted average prices, a common practice to incentivize investor participation in capital raises. Bell Potter Securities acted as lead manager, receiving a 5% fee on the proceeds. The new shares will rank equally with existing shares, maintaining shareholder equity structure.
Looking ahead, the company plans to dispatch a notice of meeting in November 2024 to seek shareholder approval for the second tranche. The successful completion of this funding round positions Sky Metals to accelerate exploration and development activities, potentially unlocking further value in the Tallebung Project.
Bottom Line?
Sky Metals’ $6.1 million raise sets the stage for a pivotal phase in Tallebung’s development, with market eyes on upcoming drilling and feasibility milestones.
Questions in the middle?
- Will the shareholder meeting approve the directors’ $592k participation tranche?
- How will recent drilling results influence the resource upgrade and project valuation?
- What impact will metallurgical testwork have on tin concentrate quality and marketability?
