Medallion Metals Advances Growth with $5 Million Placement
MEDALLION METALS LIMITED. (MM8) Share Update August 2024 Sunday 11th
Medallion Metals Secures $5 Million for Strategic Growth
Medallion Metals Limited (ASX:MM8) has successfully raised $5 million through a placement, aimed at advancing its strategic projects and potential acquisitions.
Instant Summary:
- Medallion Metals raises $5 million through a placement.
- Strong support from new and existing institutional investors, including Alkane Resources.
- Funds will support infill drilling, test work, and further studies for the Ravensthorpe Gold Project.
- Exclusive negotiations with IGO Limited for the potential acquisition of Forrestania Nickel Operation assets.
- Strengthened balance sheet with over $7.5 million in cash and receivables.
Capital Raising and Investor Support
Medallion Metals Limited (ASX:MM8) has announced that it has received binding commitments to raise approximately $5 million through a two-tranche placement. The placement received strong support from both new and existing institutional and sophisticated investors, including established gold producer Alkane Resources Limited (ASX: ALK), which will hold 4.9% of Medallion shares upon settlement.
The placement comprises the issue of 63,319,106 fully paid ordinary shares to sophisticated investors at an issue price of 5 cents per share (Tranche 1) and the issue of 36,680,894 fully paid ordinary shares at the same price (Tranche 2), subject to shareholder approval. The issue price represents a 12.3% discount to the last traded price and a 15.6% discount to the ten-day volume-weighted average price.
Use of Funds
The proceeds from the placement will be used to support Medallion's activities following the announcement of exclusive negotiations with IGO Limited regarding the potential acquisition of certain assets of the Forrestania Nickel Operation (FNO), specifically the Cosmic Boy Process Plant and associated infrastructure. The funds will also be directed towards infill drilling, test work, and further studies for the development of the Ravensthorpe Gold Project (RGP).
Additionally, Medallion plans to advance a regional drill program to test priority near-mine and regional exploration targets at RGP. The company will emerge with a strengthened balance sheet, comprising cash and receivables of over $7.5 million, to progress exploration efforts and de-risk the sulphide development plan.
Strategic Opportunities
The FNO opportunity presents a lower capital cost, lower risk, and near-term production pathway for the RGP Mineral Resources, which total 5.6Mt @ 4.3 g/t Au & 0.6% Cu for 770 koz Au and 36 kt Cu contained metal. Studies will include the assessment of standalone processing of high-grade sulphide Mineral Resources at RGP versus trucking to the Cosmic Boy Process Plant.
Medallion's Managing Director, Paul Bennett, commented that the company is well-funded to embark on a transformative new development strategy, with the gold price at record levels. The Board thanks existing shareholders for their strong support and welcomes Alkane to the register, looking forward to leveraging their development and operating experience.
The successful capital raising and strategic initiatives are likely to have a positive impact on Medallion Metals' stock. The strengthened balance sheet and potential acquisition of FNO assets could enhance the company's production capabilities and reduce risks associated with development. This could lead to increased investor confidence and a potential uplift in the stock price.
Investor Reaction:
Analysts are likely to view the capital raising and strategic initiatives positively, given the strong support from institutional investors and the potential for near-term production growth. The involvement of Alkane Resources adds credibility to Medallion's management and strategic direction, which could further boost investor sentiment.
Conclusion:
Investors should keep an eye on Medallion Metals' progress with the Forrestania Nickel Operation acquisition and the development of the Ravensthorpe Gold Project. The company's strategic initiatives and strengthened financial position could lead to significant value creation in the near future.