PERTH (miningweekly.com) – ASX-listed KGL Resources has announced a A$20.2-million capital raise to fund resource expansion and project development at its Jervois copper project, in the Northern Territory.

The company has announced a proposed 10-for-27 pro-rata traditional non-renounceable entitlement offer priced at 12c each, with up to 168.4-million new shares up on offer, raising a minimum of A$9-million and a maximum of A$20.2-million.

Three of KGL’s major shareholders have committed to take up their share of entitlements in full, providing an initial A$8.6-million in funding.

Funds raised will be used to fund activities following on from the feasibility study (FS) at Jervois last year, including project development and ongoing expansion of the resource.

“We completed the FS in November 2022 and since that time have been working on de-risking and preparing for the project. We also recommenced drilling in March 2023 with some exciting targets to explore. Proceeds from the offer, if fully subscribed, will allow the company to continue with these activities well into 2024,” said KGL executive chairperson Denis Wood.

“My opinion is that the current share price is well below the intrinsic value of the company, especially considering the forthcoming copper shortages the world faces. We have sought to structure the offer in such a way that is fair to all shareholders, which has meant some limitations on the top-up facility under the offer, but priority has been given to smaller shareholders.”

The current workstream at Jervois includes mine plan optimisation and tender for contracts for the construction, mining and operations, and KGL is also implementing a risk management plan to meet delivery timetables.

The company is also hoping to grow the resource at Jervois, with the potential existing to expand the high-grade resource and potentially extend the mine life.

The 2022 FS estimated a pre-production capital cost of A$298-million for the Jervois project, with yearly production of 24 700 t/y of metal in concentrate with gold and silver credits, with a mine life of just under 12 years.