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First Au Limited (ASX:FAU) ticks all the right boxes at Snowstorm

Source: Phawat, Shutterstock

Summary

  • A strong growth in the gold demand is anticipated on the back of recovery in the jewellery demand to pre-COVID levels in 2021.
  • First Au has planned a 1,500m drilling program to test 10-12 holes along the 350m strike length at the Snowstorm prospect.
  • FAU has announced a non- renounceable pro-rata rights issue offer to raise A$2.45 million. The offer is scheduled to close on 26 March 2021.

With the gold prices holding the US$1,700 an ounce levels, a major upsurge in the gold exploration could be expected across Australia. As per the Australia energy and resources quarterly (December edition), Australia is set to emerge as the largest gold producer in 2021. Now, that gold has proven its worth as profitable investment opportunity, the investment demand could be healthy while the consumption demand recovers to the pre-COVID levels in the upcoming years.

Must Read: Corazon Mining (ASX:CZN) turns in sturdy first half with major strides at Lynn Lake

The higher demand would be required to be complemented with robust gold supply. Australia focused gold exploration and development company, First Au Limited (ASX:FAU) owns critical gold and base metal assets in Western Australia and Victoria. Further, the seasoned technical and management team leverage modern exploration techniques to inch towards the company’s goals.

Drill rig at Snowstorm Source: 17 February 2021

Currently, the gold player is gearing up to commence the maiden diamond drilling program at the Snowstorm project in the Swifts Creek Goldfields of East Gippsland, Victoria. The drill rig has already arrived at the tenement area (EL5505). The initial program will drill over 1,500m at 10-12 holes to target the gold mineralised structure along the 350m strike length.

Must Read: First Au Limited (ASX:FAU) records gold grades of 86 g/t, drilling to commence in mid-February

Non-renounceable pro-rata rights issue offer

 

FAU has announced a non- renounceable pro-rata rights issue offer of 4 new options for every 5 shares held by the existing shareholders to raise A$2.45 million (before costs) at an issue price of $0.005 an option.

The new options will have an exercise price of A$0.028 a unit and will expire on 1 July 2023 if not exercised. Each option on exercising would entitle the holder with 1 fully paid ordinary shares of First Au.

Read This: First Au Limited (ASX:FAU) secures $1.28 Mn funding, to raise another $2.45 Mn via options issue

The funds raised during the program would be utilised towards drilling at Snowstorm project and around the Hibernia-Ernestine trend, general working capital purposes and the exploration program at Gimlet gold project to expand the existing JORC complaint inferred gold resource base.

The rights issue offer is scheduled to close on 26 March 2021 at 5:00 PM AEDT and the proposed issue date is 6 April 2021.

Read Here: First Au Limited (ASX:FAU) closes in to commence diamond drilling at Snowstorm

First Au closed at A$0.016 a share on 12 March 2021 with a market capitalization of A$9.81 million.

All financial information pertains to Australian Dollar unless stated otherwise.

 

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