PERTH (miningweekly.com) – ASX-listed Peel Mining will raise A$12.3-million to fund a maiden Joint Ore Reserves Committee-compliant resource at the Wagga Tank project, advance its Mallee Bull project towards production, and complete the acquisition of a 2% net smelter return royalty over the Wagga Tank project.

The company has raised an initial A$3.6-million through a completed oversubscribed placement, and will undertake a fully underwritten rights issue to raise a further A$8.7-million.

The placement, at 36c a share, was strongly supported, with shareholder St Barbara subscribing for A$1.8-million of new shares, and the balance of the shares placed with institutional, sophisticated and strategic investors.

A fully underwritten non-renounceable pro-rata rights issue will now be offered to eligible shareholders on the basis of one new share for every eight shares held, at a price of 36c a share. Some 24.3-million new shares will be on offer under the rights issue.

The offer price represented a 12.2% discount to Peel Mining’s last closing price on the ASX, and a 10% discount to the company’s five-day volume weighted average price.

ASX-listed MMG in August this year notified Peel that it had received an offer from a TSX-listed royalty streaming business to purchase the 2% net smelter return royalty at Wagga Tank. Under Peel’s right of first refusal, MMG offered to sell the 2% royalty to Peel for A$3.3-million in cash.

Peel has elected to exercise this right, and following the acquisition, would have full ownership of the tenements acquired from MMG.

In addition to the royalty buy, Peel would use the funds to continue to drill out the Wagga Tank/Southern Nights discovery to deliver a maiden mineral resource estimate in the first half of 2019, and to advance exploration at some of the company’s existing regional targets.

The junior would also finalise the prefeasibility study for the Mallee Bull project and start the permitting process to advance the project towards a potential near-term, low capital mining operation.