Carnavale Resources Limited (ASX: CAV) (Carnavale or the Company) is pleased to announce it has received firm commitments from professional and sophisticated investors to raise $3m (before costs) via a placement (Placement) of approximately 857.1 million shares at an issue price of $0.0035 per share (Placement Shares).
Allotment of the placement shares is expected on 20 October 2025. The Placement Shares will be issued under the Company's existing capacity to issue securities provided in ASX Listing Rule 7.1 (457.1 million shares) and Listing Rule 7.1A (400 million shares).
CEO Humphrey Hale commented: We are delighted with the results of the recently released updated Scoping Study for the Kookynie Gold Project (KGP). The Study demonstrates strong economic potential for development of the Project into a mineable operation. Carnavale's Board has initiated this total $7.09 million capital raise to fund the next chapter in the development of the KGP that centers on the completion of a bankable feasibility study (BFS) to take the Project to a shovel ready status. The Company is already in discussions with Mining Contractors to determine the best way to unlock the contained value in the Project. We have already engaged the services of some experienced key personnel with proven track records in their field and are restructuring the Board to reflect our mining intentions.
Scoping Study highlights
The updated Study highlights robust financials with a competitive cost profile utilising conservative mining parameters and current cost assumptions. The KGP is located within trucking distance to many operating gold processing plants in the Eastern Goldfields. The Scoping Study was assessed using a gold price of A$5,500. Scoping Study Highlights include: Strong economic case to develop the Kookynie Gold Project as contract mine, toll treat operation. Undiscounted free cashflow of approximately A$237m. Net Present Value (pre-tax NPV8 ) of approximately A$188m with an IRR of 165%. Initial production target (inc. mine dilution) of approx. 970kt @ 3.1g/t for 93koz Au recovered. (inc. bonanza zone of 60 kt @ 28.3g/t Au for 55koz). Total pre-production Capital of approximately $3m with maximum drawdown in the order of $21m in month 9 of operations. Initial mine life of 5 years with payback of Capital in month 14 of operations. 50% of production from the Open pits, with an initial 305kt @ 4.32g/t and 42koz coming from the Swiftsure pit.
Carnavale's development strategy
As a result of the strong economic outcomes suggested by the Scoping Study, the Company's immediate goal and prime focus is to advance the KGP to mine ready and be approved for mining during 2026. Capital raised from the placement and rights issue will be used for: Immediate commencement of a Bankable Feasibility Study (BFS) based on initial open pit mining and a toll treatment ore processing strategy with a completion date during 2026-HY2. Definition of 'maiden open pit mining reserves. Execution of a Mining Heritage Agreement with Traditional owners. Finalise grant of mining lease and associated access licenses; Advancement of discussions / negotiations on potential third party mining and milling options; Advancement of necessary technical studies for inclusion in the BFS; Funding options for the development of the mine; Stronger risk management and enhanced scheduling to enhance future cashflow and Additional exploration within the KGP area. The BFS will ultimately enable Carnavale (80%) and joint venture partner Western Resources (20%) to implement an agreed mining and processing strategy to provide best value for shareholders. The BFS work will include detailed studies that will allow the Company to derisk and have more finance options to develop the project. Upon completion of the study the KGP will be shovel ready. Study work will include: Geotech drilling to define optimum safe slope angles for the Open pit development. There is potential to reduce the strip ratio and enhance the economics over the Scoping Study outcomes. Further Metallurgical testwork will be completed to complement the initial studies. Initial studies suggest that recoveries can be between 97% and 99%. The additional metallurgical work will focus on variability testwork across the orebody and characterizing the ore for processing by a third party mill
Incentive Securities
As an incentive, key personnel retention and to better align the interests of Board members, key staff and Kookynie Gold Project technical consultants with increased Shareholder value from the potential development of KGP, the Company proposes to issue the following incentive securities after Shareholder approval at the forthcoming AGM: (a) 25 million Performance Rights to the CEO, Humphrey Hale, which will have vesting conditions that are performance related to outcomes at the KGP over the next two years. Subject to satisfaction of the vesting conditions, each Performance Right will convert to one Share; (b) 120 million options in aggregate to the CEO, Board members and the Company Secretary. The options will be exercisable at $0.006 each over a three-year period. (c) 37.5 million options in aggregate to technical consultants working on the KGP. The options will be exercisable at $0.006 each over a three-year period. Further information in relation to these incentive securities will be provided in the Entitlement Offer Prospectus. It should be noted that incentive securities numbers and exercise prices noted above are on a pre-Consolidation basis and will be adjusted accordingly subject to Shareholder approval of the Consolidation.
Contact:
Humphrey Hale
Tel: +61 8 9380 9098
(C) 2025 Electronic News Publishing, source ENP Newswire