Medallion Metals Limited (ASX:MM8, the Company or Medallion) has received binding commitments for a single tranche placement to raise $6.5 million before costs (Placement).
The Placement comprises the issue of 65,000,000 fully paid ordinary shares to sophisticated investors at an issue price of 10 cents per share, placed under the Company's ASX Listing Rule 7.1 and 7.1A capacity. The Placement shares will rank equally with existing shares on issue. The issue price of 10 cents represents a 4.8% discount to the last traded price of 10.5 cents on 30 January 2025 and an 18.1% discount to the ten-day volume weighted average (VWAP) price of 12.2 cents. Placement shares are expected to settle on 7 February 2025 and commence trading on the ASX on a normal basis on 8 February 2025
Managing Director, Paul Bennett, commented: 'Medallion emerges from this capital raising well-funded to accelerate the sulphide development strategy with the gold price at record levels. Recent drill results build confidence that tremendous value can be unlocked for Medallion shareholders by bringing Ravensthorpe resources together with Forrestania infrastructure. The Board thanks new and existing shareholders for their strong support of the capital raising. There is a strong pipeline of news and de-risking milestones to look forward to throughout 2025
Corporate & Institutional Endorsement
Existing shareholder and established gold producer Alkane Resources Limited (Alkane, ASX: ALK) supported the Placement and will hold 6.3% of the Medallion shares on issue upon settlement. Alkane's ongoing support through this Placement the previous capital raising is a strong endorsement of the Company's management, assets and strategic direction. In addition to Alkane's commitment, the Placement received strong support from new and existing institutional and professional shareholders. Specialist resources investor Lowell Resources Fund (ASX: LRT) continued its support of the Company through its participation in the Placement. Medallion is also pleased to welcome Lion Selection Group (Lion, ASX: LSX) as a new shareholder. Lion has a long track record of success supporting the growth of mining and junior resource companies. Numerous other Australian and United States domiciled institutions and professional investors participated in the Placement. Taken together, the support of these sophisticated groups highlights the merits of the Company's strategy to rapidly advance toward gold and copper production through the proposed acquisition of the Forrestania processing infrastructure
Study Highlights: Initial production inventory of 2.7Mt @ 3.9 g/t Au & 0.6 % Cu for 342 koz Au & 16 kt Cu contained Total initial metal production of 336 koz Au & 13 kt Cu Mine life 5.5 years generating pre-tax cashflows averaging $90 million per annum under base case assumptions Pre-tax free cash flow of $498 million assuming A$3,615/oz Au, A$5.54/lb Cu (base case) Pre-tax free cash flow of $637 million assuming A$4,000/oz Au, A$6.15/lb Cu (spot) Forecast average All-In-Sustaining-Cost (AISC) of A$1,845/oz of Au produced (net of by-product credit) Total pre-production capital cost of $73 million inclusive of mine establishment and process plant modifications Pre-tax NPV10 of $329 million & IRR 129% (base case) Pre-tax NPV10 of $429 million & IRR 169% (spot) Payback period: 12 months (base case), 9 months (spot) Establishment of proven & industry standard process route of gravity-flotation-CIL (Deflector analogy) at Forrestania to deliver high gold recovery (98%) and copper recovery (80%) to saleable products over the Project life Significant potential to enhance Project returns through increased throughput rate and mine life extension In addition to the initial production inventory considered in the Study, multiple strategic growth opportunities present themselves through the establishment of gold processing capability at FNO. The Forrestania greenstone belt is a historically significant gold producing region, which includes the Bounty Gold Mine (historical production approximately 1.4Moz at 5.1 g/t gold) and remains highly prospective for gold with multiple deposits and prospects situated within economic trucking distance of Cosmic Boy.
Proceeds from the Placement will be directed towards various work streams to progress the Sulphide Development Strategy, in addition to providing general working capital to the Company. Medallion expects to provide material updates in relation to both the Proposed Transaction and the RGP permitting pathway during the current quarter. The 15,000 metre in-fill drilling is significantly advanced and is expected to conclude in April. Drilling results will inform a Mineral Resource Estimate (MRE) update which will in turn inform an updated mine plan to a BFS level standard. The Company remains alert to opportunities to compress development timelines subject to the successful conclusion of negotiations to acquire FNO assets including certain pre-development works and securing of long lead time items. Placement proceeds provide flexibility to act on these initiatives when the Board determines those investments are appropriate
Contact:
Paul Bennett
Managing Director
Tel: +61 8 6424 8700
Email: info@medallionmetals.com.au
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