Pacifico raises capital and prepares to fast track production
Pacifico Minerals Ltd (ASX:PMY) has ticked another important box in terms of progressing its Sorby Hills Lead-Silver-Zinc Joint Venture Project in Western Australia.
The company has received firm commitments from sophisticated and professional investors to raise $4 million for a placement of approximately 666 million shares at a price of $0.006 per share.
This provides Pacifico with the funds required to finalise its 75% acquisition of the Sorby Hills project, as well as meeting the capital requirements in terms of continuing its phase 2 infill and expansion drilling and updated mineral resource estimate.
As indicated below, these are important steps to be undertaken as the company collects the data to feed into an optimised prefeasibility study (PFS) which is expected to be completed in the December quarter of 2019.
Placement oversubscribed
The placement was well supported by new and existing institutional investors, a promising sign in terms of the market’s confidence in both the project and management’s ability to execute its strategy.
Of further significance was the fact that the issue price represented a premium to the company’s 5 day and 10 day VWAPs (volume weighted average price), as placements particularly at the smaller end of the market are often completed at a significant discount.
Management saw this as a strong endorsement of the support for Pacifico’s strategy and the group’s growth plans in general.
Quickfire response to updated PFS
With mining leases and key permits in place, Sorby Hills is strongly positioned for development.
The funds raised from the placement will be used to finalise the company’s 75% acquisition of the Sorby Hills Project, continue phase 2 infill and expansion drilling and update the Mineral Resource Estimate for Sorby Hills Project to underpin an optimized PFS in 2019 and for general working capital purposes.
In conjunction with the placement, the company has received an extension on its payment for the final amount due as consideration for the Sorby Hills Project.
Settlement of approximately $2.5 million is due on or before 15 April 2019.
Established infrastructure assists in early production
Managing director Simon Noon saw the strong support for the placement as a show of confidence, and in discussing the implications for progressing to early stage production he said, “This funding will enable us to complete the acquisition of the 75% interest in the Sorby Hills joint venture and advance project development activities following the recent completion of a PFS update which confirmed the potential to establish a commercially robust mining operation.
“Further resource infill and expansion drilling will get underway in May ahead of a planned Mineral Resource Estimate update to support an increase in mining rate.
“Important metallurgical test work is also ongoing to optimise grade and recoveries as a prelude to an optimized pre-feasibility study which we expect to complete in Q4 this year.
“2019 will be an exciting and busy year for Pacifico where shareholders can expect strong news flow as we work to unlock value and position the company to be a significant new supplier of high grade, high quality concentrate into a lead market in deficit.”
The presence of established infrastructure will assist Pacifico in moving to production relatively quickly once it has completed the necessary studies, particularly given the necessary mining permits are already in place.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
Publishers Notice
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.