Alvo’s $2.26M Placement Fuels Palma Exploration but Dilution Risks Loom

Placement Details and Investor Support

Alvo Minerals Limited (ASX, ALV) has successfully completed a placement raising approximately $2.26 million through the issue of over 46 million new shares at $0.049 each. The placement attracted strong interest from both existing shareholders and new sophisticated and institutional investors, reflecting confidence in Alvo’s exploration strategy and recent discoveries. Notably, the company’s directors have also committed to participate in the placement, subscribing for $60,000 worth of shares subject to shareholder approval.

Accelerating Exploration at Palma Cu-Zn Project

The proceeds from the placement will be primarily directed towards accelerating drilling and exploration activities at the Palma Copper-Zinc Project located in Central Brazil. This includes expanding efforts at the recently discovered Touro Prospect, where drilling has identified massive sulphide mineralisation extending over a strike length of more than 1 kilometre. An additional drilling rig is planned to be mobilised in early 2026 to intensify exploration efforts. Beyond Touro, Alvo aims to advance exploration across a pipeline of more than 30 new prospects within the Palma project area, underscoring the district-scale potential of this volcanic massive sulphide (VMS) system.

Supporting Rare Earth Element Projects and Corporate Needs

In addition to copper and zinc exploration, a portion of the funds will support evaluation work at Alvo’s Ionic Clay Rare Earth Element (REE) projects, Bluebush and Ipora, also situated in Central Brazil. These projects represent a strategic diversification into critical minerals, complementing the company’s base metals focus. The placement proceeds will also cover corporate overheads and working capital, ensuring operational continuity as exploration activities ramp up.

Market Position and Future Outlook

Alvo’s Palma project boasts a JORC 2012 Mineral Resource Estimate of 7.6 million tonnes at 2.0% copper equivalent or 6.2% zinc equivalent, positioning it as a significant base metals asset. Managing Director Rob Smakman highlighted the strong investor support as a validation of the company’s exploration progress and potential. With ongoing drilling and downhole electromagnetic surveys guiding target identification, Alvo is poised for a busy newsflow through the end of 2025 and into 2026. The company’s strategic approach aims to discover, expand, and upgrade resources, driving value creation for shareholders.

Placement Terms and Shareholder Considerations

The placement shares will rank equally with existing shares and are issued under Alvo’s existing placement capacity. The issue price represents a 14% discount to the last traded price but a slight premium to recent volume-weighted average prices, balancing shareholder value with capital raising efficiency. Shareholder approval will be sought for director participation in the placement at an upcoming general meeting. Discovery Capital Partners acted as lead manager for the placement, facilitating the successful capital raise.