Andean Silver's Successful A$25 Million Placement to Boost Cerro Bayo Exploration
ANDEAN SILVER LIMITED (ASL) Share Update September 2024 Wednesday 18th
Andean Silver Secures A$25 Million for Aggressive Drilling at Cerro Bayo
Andean Silver Limited (ASX: ASL) has announced a successful A$25 million placement to institutional and sophisticated investors, aimed at ramping up exploration and resource growth at the Cerro Bayo Silver Project in Chile.
Instant Summary:
- Andean Silver raises A$25 million through a placement at A$1.05 per share.
- The placement price represents a 10.3% discount to the last sale price of A$1.17.
- Strong demand from both existing and new investors, particularly from the Northern Hemisphere.
- Proceeds will be used for resource conversion, exploration, working capital, and placement costs.
- Next Mineral Resource update planned for the March quarter of next year.
Successful Placement
Andean Silver Limited has successfully raised A$25 million through a placement to institutional and sophisticated investors. The placement was priced at A$1.05 per share, which is a 10.3% discount to the last sale price of A$1.17, but a 6.1% premium to the 15-day volume-weighted average price (VWAP).
The placement saw strong demand from both existing and new investors, particularly from groups based in the Northern Hemisphere. This high level of interest led to significant scale backs on applications.
Use of Funds
Upon completion of the placement, Andean Silver will have approximately A$32.8 million in cash, before costs and creditor payments. The funds will be primarily used for resource conversion activities and exploration at the Cerro Bayo Silver Project in Chile. The company plans to ramp up exploration efforts with four drill rigs, focusing on both brownfield and greenfield targets.
Additionally, the funds will cover general working capital and the costs associated with the placement. The next Mineral Resource update is expected in the March quarter of the next year.
Management's Perspective
Andean Silver's Chief Executive Officer, Tim Laneyrie, expressed optimism about the placement's success. He highlighted the overwhelming demand and the quality of investors as a reflection of the strong exploration and resource growth outlook at Cerro Bayo. Laneyrie noted that in just seven months of ownership, the team had increased the Mineral Resources by 66 million ounces of silver equivalent (AgEq), bringing the total to 91 million ounces AgEq.
Laneyrie also mentioned that the proceeds from the placement would enable the company to enhance its discovery and resource conversion efforts with up to four drill rigs on-site in the coming months. He emphasized the significant scale of Cerro Bayo, especially at a time when the demand for silver is rising, driven by industries like solar panel construction.
Future Prospects
Andean Silver remains on target to deliver its next Mineral Resource upgrade in the first quarter of the next calendar year. The company is looking forward to future results from various prospects, including Pegaso 7, Droughtmaster, and Cristal.
The Cerro Bayo Silver-Gold Project currently hosts Indicated and Inferred Mineral Resources of 8.3 million tonnes at a grade of 342 grams per tonne, translating to 91 million ounces of contained silver equivalent. The company aims to rapidly advance the project and grow the existing silver-gold resource to demonstrate a globally significant asset.
The successful placement and the planned aggressive drilling campaign are likely to positively impact Andean Silver's stock. The influx of funds will enable the company to accelerate its exploration and resource conversion activities, potentially leading to significant resource upgrades. This could attract more investor interest and drive the stock price higher.
Investor Reaction:
Analysts are likely to react positively to the news, given the strong demand for the placement and the strategic use of funds for exploration and resource growth. The planned increase in drilling activity and the upcoming Mineral Resource update could further boost investor confidence.
Conclusion:
Investors should keep an eye on Andean Silver's progress at the Cerro Bayo Silver Project and the upcoming Mineral Resource update in the first quarter of next year. The company's aggressive drilling plans and the rising demand for silver make it a promising investment opportunity. Stay informed and consider subscribing to our newsletter for regular updates on Andean Silver and other stock market news.