Wiluna Mining Corporation (ASX: WMC) has raised more than half the $81 million or so required to back further work at its Wiluna gold mining centre in WA.
The company put its shares into a trading halt late last week to allow the fund raising to be done and on Monday revealed the size of the funding at $53 million at $1 a share.
Wiluna shares ended the day at $1.105, down 3.9%.
The new capital will finance a drilling campaign at Wiluna as the company moves ahead with expansion plans at the WA gold mining operation.
The company intends to hit a run rate of 120,000ozpa by the end of next June with a Stage 1 expansion on track to be commissioned by the end of this year
A feasibility study into a larger Stage 2 expansion is due to be released in the March quarter.
In its statement on Monday Wiluna revealed a Russian gold mining executive named Vladislav Sviblov has joined forces with the company with a $15 million investment that will make him its largest shareholder.
Wikuna’s Russian gold mining and processing partner Polymetal will invest $7 million.
(Polymetal is a Top 10 global gold producer and a specialist in processing the refractory ores that make up a large portion of the 4.51 million ounces of gold at Wiluna.
Wiluna said the capital raising will provide funds for these initiatives, repay finance facilities, support existing operations and processing infrastructure without having to slow the current exploration and ore reserve drilling now underway.
On top of the new investment from Sviblov and Polymetal, Wiluna’s largest shareholder Delphi Group will subscribe for 17.85 million shares at the $1 offer price to maintain its 34.6% stake in WMC, subject to shareholder approval.
Wiluna executive chairman Milan Jerkovic has also supported the issue, while the fund manager Arlington Group Asset Management and lead broker Simon Catt have agreed to subscribe for $1 million in shares.
“We are delighted that our existing shareholders, in particular the Delphi Group, continued their ongoing support. It is also pleasing to welcome our significant shareholder Mr Vladislav Sviblov to the register,” Jerkovic said in Monday’s statement.
The fund raising comes with WMC about to deliver a new concentrator at the Wiluna Mining Centre and after an updated resource of 4.51 million ounces of gold at 3.90 grams to the tonne (g/t)
That includes a 28% increase in measured and indicated resources of 2.73 million ounces at 4.46g/t, and a high-grade component of 3.11 million ounces at 5.81g/t using a 3.5g/t cut-off.
A new ore reserve is due in March 2022, ahead of production from underground sulphide mining next year.
“Having announced our updated resources and with commissioning of the new concentrator being imminent we continue progress towards achieving commercial production from our Stage 1 development by the end of this financial year,” Jerkovic said.
“We are also on track to complete the feasibility study for Stage 2 development in the third quarter of this financial year. The funding announced today will allow us to maintain momentum with our development as well as maintain our aggressive reserve development and exploration drilling.
“We are also pleased that our alliance partner Polymetal has joined our register as a shareholder. We have an exciting future ahead of us and expect our current and new shareholders to be rewarded for their support as we execute and deliver on our development and exploration plans.”