Ausgold's Transformational Quarter: Board Changes and Capital Raising
AUSGOLD LIMITED (AUC) Share Update July 2024 Wednesday 31st
Ausgold Announces Major Developments and $38M Capital Raising
Ausgold Limited (ASX: AUC) has announced significant developments in the June 2024 quarter, including a board restructure and a successful $38 million capital raising, setting the stage for the development of the Katanning Gold Project.
Instant Summary:
- Board restructure completed with new Executive Chair John Dorward.
- Successful $38 million share placement to institutional investors.
- Strategic review of Katanning Gold Project (KGP) development plan underway.
- Settlement of key farming properties de-risking project development.
- Commencement of reverse circulation drilling program along Stanley Trend.
- 1-for-10 share consolidation approved to enhance capital structure.
- Appointment of Ben Stockdale as CFO and Troy Collie as Manager – Environment & Approvals.
- $25 million cash at bank post placement and loan note repayment.
Board Restructure
During the June 2024 quarter, Ausgold completed a significant board restructure aimed at driving the company towards the development of the Katanning Gold Project (KGP) in Western Australia. John Dorward, former CEO of Roxgold, was appointed as Executive Chair, while Adrian Goldstone and Mark Turner joined as non-executive directors. This refreshed board brings extensive mine development and operational expertise, positioning Ausgold to become Australia's next mid-tier gold producer.
The new board members have already commenced a strategic review of the KGP development plan, with an enhanced definitive feasibility study (DFS) now scheduled for completion in the first half of 2025. This review aims to optimize throughput rates and enhance the project's financing strategy.
Capital Raising
Ausgold successfully completed a $38 million share placement to institutional and sophisticated investors, providing the necessary funding to advance the KGP through to a final investment decision. The placement was supported by leading international institutional investors, including Jupiter Asset Management and Dundee Corporation. Newly appointed Executive Chairman John Dorward also subscribed for $1 million of placement shares.
The funds raised will be used to underpin ongoing work programs at the KGP, including the completion of the DFS, settlement of freehold land acquisitions, and continuation of regional exploration. Following the capital raising, Ausgold holds $25 million in cash after repaying loan notes.
Project Development
Settlement was completed on the purchase of two farming properties covering key mining and infrastructure areas at the KGP, significantly de-risking the project development. Additionally, a reverse circulation drilling program commenced along the highly prospective Stanley Trend, focusing on near-surface, high-grade gold at the Duggan and Nanicup Bridge prospects, located 40km east of the KGP.
Ausgold also announced a 1-for-10 share consolidation, approved at the General Meeting held on 24 July 2024, to provide a more effective capital structure and a share price more appealing to a wider range of investors, particularly institutional investors globally.
Management Additions
To further strengthen its leadership team, Ausgold appointed Ben Stockdale as Chief Financial Officer and Troy Collie as Manager – Environment & Approvals. Both executives bring valuable experience in project financing and environmental approvals, respectively, enhancing Ausgold's capacity to deliver the KGP.
Ongoing Work and Future Plans
The company continues to advance its flagship KGP, which represents a 17km mineralized trend with significant potential across three key zones. The DFS is being reviewed with a focus on optimizing processing throughput and improving gold recovery rates. The strategic review also includes evaluating alternative tailings storage facilities and minimizing the project's footprint to preserve valuable farming land.
Grade control drilling is planned for the Jinkas South resource area to enhance reserve definition for early mine planning. The DFS is now scheduled for completion in the first half of 2025, with ongoing baseline work including hydrogeological and geotechnical studies.
The board restructure and capital raising are pivotal for Ausgold, providing the necessary expertise and funding to advance the Katanning Gold Project. The strategic review and enhanced DFS are expected to optimize project economics and reduce risks, potentially boosting investor confidence. The share consolidation aims to improve the company's capital structure, making it more attractive to institutional investors.
Investor Reaction:
Analysts are likely to view the board changes and capital raising positively, as they bring experienced leadership and financial stability to Ausgold. The strategic review of the KGP and the enhanced DFS are expected to provide greater clarity on the project's potential, which could lead to increased investor interest.
Conclusion:
Investors should monitor the progress of the Katanning Gold Project and the completion of the definitive feasibility study. The recent developments position Ausgold for significant growth, and the company's strategic response to these changes will be crucial in maintaining investor confidence.