Alice Queen Limited (ASX: AQX) is an advanced gold explorer, based in South Yarra, Australia and listed on the Australian Stock Exchange in September 2004. The company, backed by an experienced team of mining executives and a broad investor base, is focused on several exploration and mining opportunities in its domestic market, with major projects located in the Australian states of Queensland and New South Wales.
To further aid its diversified project portfolio, which includes Horn Island and Kaiwalagal in Queensland and Mendooran and Yarindury in New South Wales, the company recently entered a binding agreement with Datt Capital for a share placement.
Details of Capital Raising
As per the company announcement on 23 September 2019, AQX is issuing 50 million ordinary shares at 3 cents per share as part of the placement to raise AUD 1.5 million from Datt Capital, which is a well-regarded and respected investor in the resources sector.
In line with the remaining placement capacity of AQX under LR7.1 and 7.1A, the shares do not need approval from the companyâs shareholders. As a result, these shares would be issued without shareholder approval. Of the total shares, 21,984,000 shares would be issued under LR7.1A, while the remaining 28,016,000 shares would be issued under LR7.1.
Though several entities had expressed their interest in injecting funds into AQX, the company determined the substantial investment from Datt Capital as the best available fundraising alternative. The share placement was made available at a premium to the market price, including
- A 10 per cent premium to the last trading price and
- A 45 per cent premium to the 20-day volume weighted average price (VWAP).
Datt Capital â The New AQX Shareholder
Melbourne-based and Australian-licensed, Datt Capital is a long-only fund manager that was established in the year 2007. With this share placement, Datt Capital would have an approximate shareholding of 6 per cent in Alice Queen, thereby becoming the third largest shareholder of the company. The other two largest shareholders of AQX are Managing Director, Mr Andrew Buxton and the Morris Family.
As the agreement was signed, Datt Capital Managing Director, Mr Emanuel Ajay Datt, highlighted several factors, owing to which the investor decided to inject funds into AQX, including
- High-quality projects of AQX such as its flagship project - Horn Island in Queensland and the North Molong Belt projects - Yarindury and Mendooran - in New South Wales;
- Ability of the management and technical teams of AQX to identify significant value for shareholders;
- The JV between Alice Queen and St Barbara, which has significantly de-risked the Horn Island project;
- Enhanced prospectivity of the North Molong Belt projects, owing to a significant discovery by Alkane Resources Limited (ASX: ALK) within 700 metres of the boundary of the EL8646 Yarindury;
- Work programs planned by AQX and St Barbara over the next one year that hold the potential for significant news flow and price appreciation;
Welcoming the new shareholder, Alice Queen Managing Director, Mr Andrew Buxton, stated that the placement completion at a significant premium to the companyâs recent trading, as it recognises that AQX holds a portfolio of assets that is not just exciting, but also offers upside potential for all its shareholders.
Use of Funds
The proceeds from the placement would be directed towards the companyâs upcoming drilling activities in New South Wales. Additionally, Alice Queen would use the funds raised to meet its working capital requirements.
In New South Wales, the company has two projects - Mendooran and Yarindury. In the Mendooran project, AQX holds a 90 per cent stake and has finished access arrangements to highest priority target areas for exploration drilling activities. Additionally, for the project, the company is planning to start a global search for a joint venture partner and perform drill testing. AQX has identified and generated 15 porphyry copper/gold targets for the drill testing program.
Holding a 90 per cent stake in the Yarindury project along trend from the Cadia Valley, AQX is planning to start drilling existing porphyry copper-gold targets at the project. In the month of August 2019, the company received investorsâ commitments for AUD 516,000 to fund initial drilling program at the project, in addition to other working capital requirements.
As AQX has plans for both its projects in New South Wales, the recent funding would aid the company in progressing ahead with the plans.
With a market cap of AUD 24.61 million and approx. 723.83 million outstanding shares, the stock of Alice Queen Limited was trading at AUD 0.034 on 24 September 2019. The stock has delivered positive returns of 88.90 per cent on a year-to-date basis, while its six-month and three-month return stands at 161.54 per cent and 209.09 per cent, respectively.
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