Alta Zinc Ltd (ASX:AZI) (FRA:8EE) has raised A$3.75 million in a strongly supported placement after receiving binding commitments from eligible professional and sophisticated investors, with funds to further advance drilling at the Gorno Zinc Project in northern Italy.
Demand was in excess of funds sought, reflecting the strong support from Alta’s key strategic shareholder Victor Smorgon Group and institutional demand from global resources fund Rab Capital
This provides a strong endorsement of the company’s brownfield exploration and resource growth strategy at the Gorno Zinc Project.
The placement funds position Alta with a strong cash balance of approximately A$5.7 million to extend the successful underground diamond drilling program at Pian Bracca and Ponente.
Validation of mineral inventory strategy
Managing director Geraint Harris said: “The placement allows us to continue to extend our current dual-rig underground drilling program at Gorno, where we have had outstanding success in identifying high-grade mineralisation in the current areas and see similar potential in both extensional and new target areas.
“The drilling completed to-date and that which is ongoing will be integrated into our upcoming mineral resource update and these funds will allow drilling to continue to further expand the resource base at Gorno and to advance our other exciting regional projects.
“We are extremely grateful for the continued, strong support of our key shareholder, Victor Smorgon Group and the increased participation of Rab Capital.
“It provides a validation of Alta’s strategy to significantly enlarge the mineral inventory of the historic Gorno mine as well as develop a pipeline of exciting base, precious and battery metals opportunities in a stable and supportive European jurisdiction.”
Alta Zinc expects strong near-term news-flow with a dual-rig drill program ongoing at Pian Bracca and Ponente.
The placement was undertaken at an issue price of A$0.005 per share, raising A$3.75 million (before costs).
This represents a 16.7% discount to Alta’s last close of A$0.006 per share on March 19, 2021, a 16.7% discount to the 15-day VWAP of A$0.006 per share and a 19.4% discount to the 30-day VWAP of A$0.0062 per share.
It will comprise the issue of a total of 750 million new fully paid ordinary shares in Alta with the placement being conducted pursuant to the company’s existing placement capacity under ASX Listing Rules 7.1 and 7.1A.
A total of 541,604,876 new shares will be issued under Listing Rule 7.1 and 188,395,124 new shares will be issued under Listing Rule 7.1A – ranking equally with existing fully paid ordinary shares.
The managing director (or his associates/related parties) subscribed for shares worth a total of A$100,000 in the placement.
Placement settlement will complete on Tuesday, March 30, 2021, with 20 million shares to be issued to the managing director subject to shareholder approval at a general meeting expected to take place in early June.
Discovery Capital Partners and Foster Stock Broking acted as joint lead managers to the placement.