Tolu Minerals Limited has announced a successful placement, raising A$26.7 million (Australian Dollars) from sophisticated and institutional investors at an issue price of A$0.80 per share.
In an exclusive interview, Tolu Minerals Managing Director and CEO Iain Macpherson told PNG Business News that this funding will significantly strengthen and accelerate the company's ongoing efforts in exploration and redevelopment of the Tolukuma Gold Mine in the Goilala District of Central Province, Papua New Guinea (PNG).
The placement received strong demand from both new and existing investors, reflecting confidence in Tolu's strategy to leverage the historical infrastructure of the Tolukuma mine to not only grow a substantial Mineral Resource, but also to return the mine to high grade production, Macpherson said.
The proceeds from the placement will be allocated towards accelerating exploration activities, redeveloping the mine—which includes study work, mine development, and dewatering—and providing working capital to support operational costs, he added.
Macpherson said the placement was “a very pleasing outcome. I am also delighted with the ongoing support of a number of leading global institutional gold funds and existing shareholders.”
This placement enables Tolu Minerals Limited to accelerate both its regional and near mine exploration as well as to continue the rapid refurbishment of the mine “back into near term high-grade gold and silver production,” he said.
The CEO also provided insights to PNG Business News into preliminary findings from Phase 1 of the company’s Airborne Mobile Magneto Telluric (MT) survey, covering 723 km², including ML 104 and surrounding exploration licenses.
“The ongoing airborne survey is proving to be an invaluable tool in targeting future exploration and has already highlighted a number of near mine epithermal targets as well as several regional targets,” he said.
The survey revealed advanced copper-gold porphyry and gold epithermal targets as a precursor to field work in preparation for drill testing. Based on reports, within ML 104, a significant conductivity irregularity shows an extension of minerals extending over 2 km south of the mine site, Macpherson said.
Furthermore, the Belavista target, located approximately 10 km west of Tolukuma, supports historical samples with high-grade readings, suggesting promising porphyry mineralization. The mineralized areas around Tolukuma are being prepared for immediate drill testing this year, he added.
The MT survey is continuing over Tolu’s other prospects and will ultimately provide a wealth of invaluable information “that will support the regional exploration not only for Tolu’s core target being epithermal structures and mineralisation, but also importantly copper-gold porphyry’s that represent an entirely different style of target,” the CEO said.
The ongoing airborne MT survey is also identifying potential exploration targets, having revealed several near-mine epithermal targets and regional prospects.
The survey, comparable to a successful initiative undertaken by another gold company, K92 in PNG, aims to uncover structures and mineralised zones extending beyond 1,000 meters in depth.
Macpherson said, “The survey is proving adept at identifying structures and mineralised zones, including both epithermal and porphyry style mineralization, to depths in excess of 1,000m below surface.”
“The survey will be continued over the coming weeks and I look forward to updating the market later this year with the outcomes of this work as well as providing a general update on progress. This survey work was instrumental in the value creation path of fellow PNG gold company K92, which we aim to emulate."
The company currently holds a strong financial position, with pro forma cash estimated at A$29.4 million before costs associated with the placement, Macpherson said. This robust cash position will support Tolu Minerals Limited ambitious plans to expedite both regional and near-mine exploration initiatives.
“This accelerator placement enables us to accelerate and add to our existing plans to accelerate exploration on some of those key targets with field work and ultimately with drilling. More than that though it’s also about accelerating the return of the mine to production and being able to ramp up the production faster than we originally envisaged,” he added.
The placement details indicate that approximately 33.4 million new shares will be issued, utilizing the company’s available Listing Rule 7.1 and 7.1A capacity. The placement price represents a 60% premium over Tolu's initial public offering price and a discount to its recent trading prices.
Stakeholders can anticipate further updates regarding the ongoing airborne survey and overall progress in the coming months, Macpherson said.
