PERTH (miningweekly.com) – ASX-listed junior Sovereign Metals will raise A$6.5-million through a share placement to continue development work at the Malingunde flake graphite project, in Malawi.
Sovereign on Wednesday told shareholders that it had secured commitments from institutional and sophisticated investors in Australia and the US, to subscribe for 59.1-million shares at 11c each.
The issue price represented a 15% discount to the company’s last closing price on the ASX.
“We are delighted to have raised funds to complete all technical disciplines required to proceed with a final investment decision at Malingunde. The significant institutional support received from Australia and the US highlights the demand for simple, low-cost projects in the rapidly expanding graphite space,” Sovereign MD Julian Stephens said on Wednesday.
The shares will be placed in two tranches, with the first tranche of more than 38.9-million shares being issued under the company’s placement capacity. The second tranche of more than 20.1-million shares will be subject to shareholder approval.
A scoping study into the Malingunde project estimated that the project could produce 44 000 t/y of concentrate at a capital cost of $29-million, over an initial mine life of 17 years. The study is based on a mineral resource of 65.1-million tonnes.