JOHANNESBURG (miningweekly.com) – ASX-listed Kidman Resources is raising $21-million to accelerate an exploration programme at its Mount Holland project, including comprehensive drilling programmes at the Earl Grey lithium deposit and the Blue Vein gold deposit, in Western Australia.

The miner issued 73.7-million fully paid ordinary shares at 28.5c apiece and noted on Wednesday that it was heavily oversubscribed, reflecting strong support for its projects.

The placement will be completed in two tranches with almost 56.6-million shares issued in the first tranche. The remaining 17-million shares will be issued in a second tranche, conditional on shareholder approval.

Part of the proceeds will also be used for exploration drilling to follow up a number of high-grade gold targets beneath historic openpits within Mount Holland, while strengthening the company’s balance sheet and working capital issues.

Key objectives of the drilling programme are to fast-track a maiden resource estimate for the Earl Grey lithium project, to undertake a resource drill-out at the Blue Vein gold deposit and to complete an extensive exploration programme across a number of high-priority gold projects.

Kidman announced last month that assay results from five holes drilled at the Earl Grey lithium project had returned outstanding results with high grades of up to 2.5% lithium oxide over wide intervals of up to 52 m. Significantly, all holes terminated in lithium mineralisation.

Following completion of the placement, Kidman intends to immediately start a systematic drilling programme across the Earl Grey deposit to determine the width of the mineralised pegmatite and to target the pegmatite up-dip near surface and laterally along strike.

The diamond core will be used for metallurgical testwork, with the aim of demonstrating the potential to produce a saleable coarse spodumene concentrate, determining likely recoveries and gathering other key information needed for process plant design.

Earl Grey is one of several major lithium-bearing pegmatites at Mount Holland, all of which are on granted mining leases.