Spartan Resources has received firm commitments to raise $220 million to fast-track the recommencement of operations at the Dalgaranga gold project in Western Australia.
The placement was conducted at an offer price of $1.32 per share, which represents a discount of approximately 4.9 per cent to the five-day volume-weighted average price to December 2 and a discount of approximately seven per cent to the last closing price of $1.42 per share prior to the placement.
The placement saw Ramelius Resources – Spartan’s largest shareholder –increase its stake from 18.3 per cent to 19.9 per cent, with the company paying $1 per new Spartan share.
“Consistent with its long-running strategy, Ramelius continually evaluates gold assets in Western Australia and will make investments in the sector where it believes there is a strong rationale,” Ramelius said.
Spartan will use the funds to accelerate production restart activities at Dalgaranga over the next two years, as well as an expanded drilling campaign across the site.
These activities include:
- the continuation of underground mine development towards the Never Never and Pepper deposits at the underground exploration decline, which is expected to be completed in the second quarter of 2025
- commencing infrastructure early works such as a paste plant and mill modifications including a ball mill to increase the Dalgaranga mill’s operational readiness over the next 12–18 months
- underground in-fill and extensional drilling in early 2025 at Never Never and Pepper
- extension drilling at the broader Gilbey’s Complex, including priority targets similar to Never Never.
“This is a pivotal capital raising for Spartan which puts us firmly on track to re-start production and become the next significant mid-tier high-grade gold producer on the ASX,” Spartan interim executive chairman Simon Lawson said.
“The proceeds significantly strengthen our balance sheet, giving us a pro-forma cash position of $290 million with no debt. This means we can execute our development strategy while at the same time unlocking the full potential of the Dalgaranga gold project through continued aggressive exploration.”
Spartan is currently working on a feasibility study for Dalgaranga, which is expected to be published in mid-2025. It will incorporate the company’s recent mineral resource estimate.
Lawson said the company expects to move towards a final investment decision for Dalgaranga shortly after the feasibility study is released.
“We have come a long way in transforming the Dalgaranga project in less than two years, and we see further huge potential within 5km of the mill to add ounces and scale beyond Never Never and Pepper,” he said.
“Never Never and Pepper will form the core of the re-start feasibility study, and the recent drilling success at the likes of Freak, West Wings, Four Pillars and Patient Wolf present exciting opportunities to further increase the resource base and mineral inventory in order to grow production and mine life.”
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
