Alchemy (ASX:ALY) secures commitments for $5.5M placement to fuel WA and NSW exploration

Highlights

• Alchemy Resources (ASX:ALY) has received bidding commitments for its AU$5.5 million placement.
• The placement will help expedite exploration across the high priority lithium assets at Karonie and Lake Rebecca.
• The company also plans to channelise the funds towards its advanced suite of base and battery metals projects in New South Wales.

ASX-listed exploration company Alchemy Resources Limited (ASX:ALY) has boosted its financial position with a strongly supported, single-tranche placement. The company has updated the market about receiving binding commitments for its capital raising program worth AU$5.5 million (before costs).

With this development, Alchemy believes that it is well-funded to accelerate exploration at its projects across Western Australia and New South Wales.

Overview of $5.5M placement

The placement received support from new as well as existing institutional and sophisticated investors. Nearly 220 million fully paid ordinary shares under the placement will be issued at AU$0.025 per share on or about Monday, 17 October 2022.

The share price represents a discount of

• 2% to ALY’s closing share price of AU$0.033 on 6 October 2022
• 3% to the 5-day VWAP of AU$0.0285
• 2% to the 15-day VWAP of AU$0.0278

Also, the placement shares will hold the same status as the existing fully paid ordinary shares.

How will Alchemy channelise the newly raised capital?

Alchemy believes the newly raised capital, along with its existing pro-forma cash reserves of AU$2 million, will enable the following activities:

1. Drilling (reverse circulation and aircore) along with soil sampling programs at the Karonie Lithium and Gold Projects.
2. Pursue exploration programs targeting lithium and gold at the Lake Rebecca Project.
3. Testing extensions to existing mineralisation at its Overflow and Yellow Mountain Gold/Base Metals Projects in the Cobar Basin, New South Wales, via diamond drilling and reverse circulation drilling.

The proceeds raised will also help to meet the company's general working capital requirements and other corporate costs.

Indicative project activities’ timeline

Alchemy expects to commence the first pass program of 3,000-5,000m of reverse circulation drilling at its Karonie lithium targets in October 2022. The program will target to test the high-tenor anomalism at the Hickory Prospect and along strike.

The Lake Rebecca project is expected to undergo the first pass reconnaissance exploration targeting lithium and gold reserves in the fourth quarter.

At its New South Wales assets, Alchemy has completed heritage surveys and is on the verge of finalising land access agreements. As per the company, these developments will assist in commencing drilling programs targeting the high-grade copper, lead and zinc targets at Yellow Mountain.

The company has also planned to follow up exploration at the Overflow project to the north to further enhance the previously reported high-grade gold, lead, and zinc mineralisation.