PERTH (miningweekly.com) – Copper developer KGL Resources has announced plans to raise A$24.2-million in a one-for-six non-renounceable entitlement offer, priced at 37c a share.

KGL on Wednesday said that up to 65.3-million shares would be on offer, with a minimum raising target of A$9.9-million set.

Two of KGL’s major shareholders, KPM Investments and Denis Wood, have already advised the company of their intention to take up their full entitlement, raising a combined A$8.1-million.

Proceeds from the entitlement offer will be used to fund front-end engineering design work at the Jervois copper project, in the Northern Territory, and to fund the final stages of the feasibility study.

“The feasibility study is nearing completion and while it has taken longer than initially expected, it has allowed us to use an updated and improved resource as the basis of the mine plan and also incorporate into our plant design the requirements of the Glencore agreement,” said KGL executive MD Simon Finnis.

“It is considered likely that this will improve the feasibility outcomes.”

KGL has inked a binding offtake agreement with Glencore over all of the copper concentrate to be produced at Jervois, and the evergreen agreement would have a minimum term of five years from the start of commercial production with sale price for the copper concentrate to be volume-based and calculated with reference to the LME cash settlement price for copper, with silver and gold credits.

“Now the feasibility study is in its final stages, we need to maintain momentum on the project by completing this raise. If we achieve a good take-up on this issue, we will be in a strong position to place orders for long-lead items, commence early site works and derisk the construction by locking in prices and timing of key equipment, based on the outcomes of the feasibility study,” said Finnis.

The offer is expected to open on April 26 and will close on May 5.