Shares in Asara Resources Ltd (ASX: AS1) have jumped more than 10% on Friday after the company announced it had raised $60 million to fast-track exploration drilling.
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Cashed up to explore
While shares typically fall on news of a capital raise, Asara shares were 11.5% higher in early trade at 14.5 cents, despite the new raise being conducted at 12.5 cents.
It's a substantial amount of new equity for the company, which is valued at $208.8 million.
Asara said in its statement to the ASX that the raise had enjoyed strong demand from existing and new tier-1 international and domestic institutional investors.
The money will be used for an accelerated exploration program at the company's flagship Kada gold project in Guinea.
Asara Managing Director Matthew Sharples said:
We are delighted with the outstanding outcome of the Placement, which was supported by overwhelming demand and resulted in the introduction of a number of high-calibre institutional investors to our share register. This Placement significantly strengthens our shareholder base with long-term, supportive investors and provides a strong financial platform from which Asara can aggressively fast-track exploration at Kada toward development and production readiness. Importantly, the funding will also support expansion of our land position and broader exploration footprint as we work to grow the Kada project into a Tier 1 gold development asset.
Shareholder approval will be required for $10 million of the raise.
The company said in its statement that the funds would be used for resource definition drilling to increase the current 923,000-ounce gold resource at Kada.
Funds would also be used for regional drilling, mine design, geotechnical drilling, and reconnaissance exploration to identify satellite deposits.
Building on success
Asara also announced in recent days good drilling results from the Massan deposit within the Kada project.
Mr Sharples said re those results:
These initial results from drilling the newly interpreted Southern High-Grade Extension are extremely encouraging and confirm the potential of this zone as a significant high-grade extension of the Massan Core. Intercepts such as 5m @ 31g/t Au, including 1m @ 155g/t Au in MSRC26-041, and 6m @ 4.5g/t Au, including 2m @ 12.6g/t Au in MSRC26-045, highlight the strength and continuity of mineralisation across the extension. Importantly, this Southern High-Grade Extension links directly with the recently discovered Northeast High-Grade Extension, where we continue to see consistent high-grade results.
Aara shares have traded as low as 3.7 cents over the past year and as high as 16.5 cents.
