Sovereign Metals digs up funding to conduct Feasibility Study
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Formal confirmation of how plentiful its flagship Malingunde Project will be, is a step closer for Sovereign Metals (ASX:SVM).
The Australian graphite junior, has announced that it has now secured A$6.5 million through the issue of 59 million new shares at $0.11 each, as part of a capital raising aimed at institutional and sophisticated investors in Australia and the United States.
The capital raising also included Sovereign’s Chairman Ian Middlemas, who has also chosen to participate in the Placement, for a total of 2 million shares, subject to necessary ASX and company approvals.
Sovereigns’ Placement is due to be completed in two tranches:
Tranche 1: 38,956,189 new ordinary shares at $0.11 each to raise approximately$4.3 million before costs.
Tranche 2: 20,134,720 new ordinary shares at $0.11 each to raise approximately$2.2 million before costs. Tranche B is subject to shareholder approval at a general meeting of Shareholders to be held on or around 8 December 2017.
According to sources from within Sovereign, it expects to complete Tranche 1 of the placement in early November 2017 and move onto Phase 2 immediately thereafter.
The multimillion dollar capital injection will likely be used to expedite ongoing exploration activities at the Sovereign’s wholly-owned Malingunde Flake Graphite Project in Malawi, including all technical works, enabling completion of the pre-feasibility and definitive feasibility studies.
However, it is early stages in this company’s development and investors should seek professional financial advice if considering this stock for their portfolio.
The Malingunde Project is already JORC certified, with an Indicated and Inferred Resource of 28.8 million tonnes at 7.1% TGC at 4% TGC cut-off, including a high-grade component of 8.9 million tonnes at 9.9% TGC (7.5% TGC cut-off). Sovereign hopes to upscale its operations over time by sequentially adding to its existing JORC Resource and gradually expanding its endowment at Malingunde.
Significantly, 80% of the total saprolite and 80% of the high-grade component is in the Indicated Resource category.
Dr Julian Stephens, Sovereign’s Managing Director commented, “We are delighted to have raised funds to complete all technical disciplines required to proceed to a final investment decision at Malingunde”.
“The significant institutional support received from Australia and the United States highlights the demand for simple, low-cost projects in the rapidly expanding graphite space,” he added.
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