PERTH (miningweekly.com) – Metals explorer Xanadu Mines is hoping to raise A$12-million to fund exploration work at its flagship Kharmagtai copper/gold project, in Mongolia.

Xanadu on Monday announced that it would issue 266.7-million shares, at a price of 4.5c each, in two tranches.

The offer price represented a 23.7% discount to the company’s last closing price and a 20% discount to its five-day volume weighted average share price.

The first tranche is expected to raise an initial A$5.6-million, and will be placed under the company’s existing placement capacity, while the second tranche to raise a further A$6.4-million will be subject to shareholder approval at a general meeting scheduled for mid-September.

Xanadu told shareholders that existing shareholder Asia Capital and Advisors would subscribe for A$3.5-million worth of new shares to retain its existing shareholding in the company.

“We are delighted with the strong support received from existing shareholders and several new sophisticated institutional investors,” said Xanadu non-executive chairperson Colin Moorhead.

“We are also very pleased to welcome a number of domestic institutional investors as new shareholders to Xanadu. This placement enables us to further strengthen our share register and our balance sheet which will enable Xanadu to execute its exploration strategy with vigour and unencumbered.”

The proceeds of the placement will fund exploration drilling and resource definition drilling at Kharmagtai, which currently has an indicated resource of some 129.3-million tonnes, containing 703 000 t of copper equivalent, 468 000 t of copper, and 1.4-million ounces of gold. The project also has an inferred resource estimate of 468.9-million tonnes, containing 1.9-million tonnes of copper equivalent resource, 1.4-million tonnes of contained copper and 2.8-million ounces of contained gold.