Skylark wins strategic backing for expanded Zaranou gold drilling

PDI Gold takes 9.9% stake in A$20m placement

Skylark Minerals Limited (ASX:SKM) has secured a much-needed funding platform for its next exploration phase, with firm commitments for a A$20 million placement at A$0.24 a share. The raise includes approximately A$5.1 million from PDI Gold Limited (ASX/TSX:PDI), which is expected to hold 9.9% of Skylark once both tranches are completed.

The issue price represents a 5.5% premium to Skylark’s last traded price of A$0.228 on 28 October, as well as premiums to its five-day and 10-day volume-weighted average prices. The transaction will issue 83.33 million new shares, taking the indicative shares on issue to 214.10 million and implying an undiluted market capitalisation of A$51.38 million at the offer price.

Zaranou resource growth sets the drilling agenda

The proceeds are principally earmarked for systematic reverse-circulation and diamond drilling at the Zaranou Gold Project in Côte d’Ivoire, alongside geological, technical and resource-development work. Skylark’s October resource upgrade more than tripled the project’s Inferred Mineral Resource to 29.0 million tonnes at 1.28 grams per tonne for approximately 1.20 million ounces of contained gold.

The next programme will target depth extensions at Zaranou Central, the corridor linking Ehuasso, Coffee Bean and M’Basso, extensions at M’Basso South and additional regional targets. M’Basso currently contributes approximately 873,000 ounces to the resource, with mineralisation defined across about 2 kilometres of strike and remaining open along strike and at depth. The company says the resource covers only a relatively small portion of the broader prospective corridor.

Second tranche leaves shareholder approval as a condition

Approximately A$7.85 million of the placement will be issued under Skylark’s existing ASX placement capacity. The remaining A$12.15 million, including part of PDI Gold’s subscription, requires shareholder approval at an extraordinary general meeting expected in early December. Directors have also committed to subscribe for A$2.05 million, subject to that approval.

On the company’s indicative figures, the completed placement would leave Skylark with approximately A$21.1 million in cash after offer costs. PDI Gold will also receive a 24-month opportunity to participate in future capital raisings on terms no less favourable than those offered to other investors, while a standstill prevents it from increasing its relevant interest above 9.9% during that period, subject to standard exceptions.

Funding runway replaced by a test of exploration delivery

The placement materially changes the immediate funding picture after Skylark’s disclosed funding shortfall had left the next drilling campaign dependent on a capital raising. It also brings an established West African producer onto the register, although PDI Gold’s investment is not a guarantee of exploration success or future development.

The more important test now moves from financing to execution: whether the expanded drilling programme can convert open mineralised corridors into a larger and more robust resource. The first tranche is expected to settle in November, while the second remains contingent on the December shareholder vote and the company’s exploration plans remain subject to the usual geological uncertainty.