PERTH (miningweekly.com) – ASX-listed Alkane Resources will raise up to A$54.8-million through a share placement and rights issue to accelerate exploration and development activities in the Tomingley Corridor, in New South Wales.

The company on Thursday told shareholders that it had received commitments to raise an initial A$20-million through an institutional placement, and would issue more than 36.36-million shares.

Alkane will also undertake a non-underwritten one-for-eight pro rata non-renounceable rights issue to raise up to a further A$34.8-million.

While the rights issue is not underwritten, all of Alkane’s directors and several major shareholders, representing some 26% of the current shares on issue, have committed to taking up their entitlement, for a combined subscription of A$9-million.

“We welcome our new shareholders to the Alkane register, who join at a very exciting time for the company. The accelerated development timetable for the Tomingley Corridor positions Alkane to return to full mill utilisation at Tomingley as quickly as possible to deliver increasing cash flow.

“With the continued strength of gold prices, in Australian dollar terms, and processing infrastructure already in place, ongoing operating cash flow generated at Tomingley will be excellent support for the balance of the business,” Alkane MD Nic Earner said.

Funds raised will go to accelerate resource drilling at the Tomingley Corridor ahead of underground mining at Roswell and San Antonio, as well as the development of an underground exploration decline to drive underground from the existing Wyoming One mine to Roswell and San Antonio.

Funds will also be used to purchase land over a section of the Tomingley Corridor that will be suitable for a ventilation rise to support the underground deline, and to fund regional exploration.

“The continued exploration at Boda, where step-out drilling is underway, has considerable potential to create value for Alkane shareholders. Alkane’s 2020 programme aims not only to assess Boda and surrounding mineralisation, but also to test other Boda-style targets across our licences.

“This equity raising ensures Alkane continues its history of balance sheet strength as it heads into a very active 2020, putting the company in a strong strategic position.”