PERTH (miningweekly.com) – ASX-listed Pure Alumina has announced its intentions to raise A$2-million through a share placement and entitlement issue to fund exploration work at its gold tenements.

A two tranche share placement of more than 73.2-million shares at a price of 0.9c each, will raise an initial A$659 377, with the first tranche placement consisting of more than 33.2-million shares and to be issued under the company’s existing placement capacity.

The second tranche placement would be subject to shareholder approval.

One new option will be issued for each two shares subscribed for under the share placement, at a strike price of 2.5c each and an expiration date of December 2022.

In addition to the share placement, Pure Alumina will also undertake a fully underwritten, non-renounceable pro rata entitlement offer, allowing shareholders to subscribe for three new shares for every five shares held, also at a price of 0.9c each.

One new option will also be issued for every two shares subscribed for.

Some 153-million shares are under offer in the entitlement issue, to raise approximately A$1.37-million.

“The capital raising is a very positive outcome for Pure Alumina in what is currently a challenging operating and financing environment for many exploration companies, given the well documented impact of Covid-19,” said chairperson Tom Eadie.

“Importantly, we are pleased to have been able to structure a capital raising in a manner that will provide existing shareholders with the opportunity to participate in the capital raising through the entitlement issue.”

The funds raised will go towards the further exploration of existing gold tenements, and to undertake due diligence and related costs on potential acquisition opportunities.

Meanwhile, Pure Alumina on Friday announced a mineral resource estimate for its Hargraves gold project, in New South Wales, of more than 2.3-million tonnes, grading 2.38 g/t gold for 177 652 oz of contained gold.

Pure Alumina noted that nearly half of the total mineral resource has been classified as indicated, owing to the confidence in the geological continuity and grade of mineralisation in well drilled regions of the project.

The combined resource for the Hill End and Hargraves projects now stands at about 501 552 oz.