Aurum Resources has just pulled off a very tidy bit of corporate matchmaking in West Africa, locking in $28.8M under a 48-million-share placement at 60 cents and, in the process, roping in giant African gold producer Perseus Mining as a cornerstone backer.
Perseus is tossing $23.69M into the kitty to emerge with a 9.9 per cent holding in Aurum. The move looks like a strategic toe in the door, given the two companies are practically neighbours on the Côte d’Ivoire map.
At 60 cents a share, the raise was struck above Aurum’s last close of 59.5 cents and at only a modest discount to the recent five-day volume weighted average price of 60.9 cents.
Managing director Dr Caigen Wang is also planning to back his own story by subscribing for 1.4 million shares, tipping in $840,000, subject to shareholder approval expected in May.
Perseus is one of Africa’s major gold producers. The company operates three producing gold mines across Ghana and Côte d’Ivoire and is building its Nyanzaga gold project in Tanzania, which hosts 4.04 million ounces of gold in reserves and is targeting first gold in the next 12 months.
Notably, Perseus’ Sissingué operation sits a mere 60 kilometres north of Aurum’s flagship Boundiali project, in the same major 250km-long chunk of the gold-prospective Birimian-age greenstone belt, while its Bagoé mining lease nudges up against Aurum’s BM exploration permit.
Once the dust settles on the placement, Aurum says it expects to be sitting on more than $60M in cash, giving it plenty of firepower to step on the gas with its dual-project growth strategy at Boundiali and Napié.
Aurum’s plans to keep its drills humming through a 130,000-metre program this year, with 100,000 metres at Boundiali and 30,000 metres at its Napié project, 95 kilometres southeast of Boundiali. At the same time, the company is pushing Boundiali through its project study pipeline.
The company is targeting delivery of its Boundiali pre-feasibility study in April, followed by a definitive feasibility study, slated for December. To hit those milestones, Aurum is eyeing off two more diamond drill rigs to lift its owner-operated fleet to an astonishing 14 machines.
Aurum Resources managing director Dr Caigen Wang said: “Perseus Mining’s decision to cornerstone this placement is a powerful endorsement of the quality of Aurum’s asset base and our project development trajectory. Perseus is not just Australia’s most successful African gold producer and developer – it is our nearest neighbour.”
The timing of the placement is no accident. Just a month ago, Aurum beefed up its Boundiali mineral resource to 99.7 million tonnes at an average grade of one gram per tonne (g/t) gold for 3.03 million ounces of gold.
That resource has been significantly upgraded and now includes a hefty 49 per cent lift in the indicated component to 40.8 million tonnes containing 1.37 million ounces of gold.
Those latest higher-confidence ounces are now feeding straight into the company’s upcoming Boundiali studies.
Meanwhile, over at its separate Napié project, which currently hosts 800,000 ounces, Aurum has also been keeping the market fed with fresh drilling spice, reporting broad, shallow, high-grade hits earlier this month from the Tchaga and Gogbala deposits.
Recent hits include 19 metres assaying 5.16g/t gold from 146m depth at Gogbala, and 18.9m going 2.59g/t gold from 176.1m at Tchaga.
An updated Napié mineral resource estimate is due this quarter, which will put another layer of context around the year’s planned 30,000 metres of drilling for the project.
With a big cash buffer, a burgeoning army of drill rigs and a serious heavyweight neighbour now on the register, Aurum looks well set to keep the news flow rolling as it shifts gears from pure explorer to developer mode.
With Aurum keeping the drill rods turning, upgrading resources into higher-confidence categories and expanding its Côte d’Ivoire footprint, the gold company looks like one to keep firmly on the watchlist.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Doug Bright
