PERTH (miningweekly.com) – ASX-listed Australian Vanadium is hoping to raise up to A$27.5-million to finance work at its namesake project in Western Australia.

The company on Friday announced that it had received firm commitments from new and existing shareholders for the placement of 425.5-million shares, at a price of 4.7c each, to raise an initial A$20-million.

The placement price represented a 17.5% discount to Australian Vanadium’s last closing price, and a 17.4% discount to the company’s five-day volume weighted average share price.

The shares will be placed in a single tranche under the company’s existing placement capacity, and will not require shareholder approval.

In addition to the share placement, Australian Vanadium will also undertake a share purchase plan (SPP), to raise up to A$7.5-million. Under the SPP, eligible shareholders will be able to subscribe for an additional A$30 000 worth of Australian Vanadium shares.

The SPP will open on May 26 and close on June 16.

“We are extremely pleased with the overwhelming support we have received for this capital raising. The capital raising saw new institutional and sophisticated investors join the register, as well as receiving strong participation from Australian Vanadium’s existing shareholders. We are also pleased to provide an opportunity for our valued retail investors to participate in the capital raising through the offer of the SPP,” said MD Vincent Algar.

“The funds raised through the placement and the SPP will ensure that the company remains well funded while we implement the next phases of the development programme for the Australian Vanadium project.”

A recent bankable feasibility study into the Australian Vanadium project estimated a cost of $435-million to develop a 24.7-million pound vanadium pentoxide and 900 00 t/y of iron-titanium operation.

Based on an updated ore reserve of 30.9-million tonnes, at 1.09% vanadium oxide, the project is expected to have a mine life of 25 years, generating yearly earnings before interest, taxes, depreciation and amortisation of A$175-million.