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Highlights
- AU$220 Million Raised: Spartan Resources secures a substantial AU$220 million through a placement of new shares to institutional and sophisticated investors.
- Focused on Underground Development: Funds will primarily support underground mine development, including drilling, infrastructure, and exploration activities at key sites like Never Never.
- Strategic Milestones: The capital will also finance mill modifications, operations readiness, and a significant royalty buy-back to enhance the Dalgaranga Project.
Spartan Resources Limited (ASX:SPR) has announced that it has successfully raised AU$220 million (before costs) through a placement to institutional and sophisticated investors. The placement, which involves the issuance of approximately 166.7 million new shares, represents a 15% increase in Spartan's current shares on issue. The new shares are priced at AU$1.32 each, reflecting a discount of approximately 4.9% compared to the 5-day VWAP to December 2, 2024, and a 7.0% discount to the last closing price of AU$1.42 per share.
Use of Funds and Strategic Allocation
The proceeds from the placement, when combined with Spartan’s existing cash balance of approximately AU$70 million (as of November 30, 2024), will be allocated across several key areas over the next 18-24 months.
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Exploration Decline & Underground Mine Development – AU$130 Million:
A significant portion, AU$130 million, will be allocated towards underground mine development, including the construction of approximately 11,000 meters of underground tunnels in CY2025/26. The focus will be on advancing multiple development levels and targeting the first ore. An additional AU$24 million will be spent on completing the underground exploration decline to reach the Never Never orebody, which includes building necessary capital infrastructure. -
Underground Drilling – AU$21 Million:
Spartan plans to invest AU$21 million into underground drilling efforts starting in early 2025. This drilling will target various priority sites, including Never Never, Pepper, Freak, Four Pillars, West Winds, and other promising exploration targets. -
Surface Drilling & General Exploration – AU$21.5 Million:
Spartan will direct AU$21.5 million towards an expanded surface drilling campaign focused on the broader Gilbey’s Complex and "lookalike" targets similar to Never Never. -
Infrastructure Early Works and Mill Modifications – AU$70 Million:
A substantial portion of the funds, AU$70 million, will go towards improving the Dalgaranga Project’s operational capacity. This includes AU$27 million for infrastructure works, AU$37 million for mill modifications and refurbishments, and AU$6 million for feasibility and optimization studies. -
Royalty Buy-back – AU$4.5 Million:
The company plans to spend AU$4.5 million to buy back 20% of the 2.5% Tembo/Taurus royalty, which is expected to provide strategic long-term benefits. -
Corporate Costs and Working Capital – AU$34 Million:
The remaining funds will cover corporate costs and working capital requirements, including transaction costs estimated at AU$9 million.
