Alchemy Resources Limited (ASX: ALY) (Alchemy) (Company) is pleased to announce that it has received firm commitments to raise $1.0 million (before costs) via a placement of 66,666,667 ordinary fully paid shares (Placement Shares) and 16,666,667 attaching unlisted options (Placement Options) (Placement).
The Placement Shares will be issued at $0.015 per Share along with a one for fourfree attaching Placement Option exercisable at $0.03 and expiring on 30 September 2022.
The Placement is being made at a 16.5% discount to the volume weighted average market price of Alchemy's Shares of $0.018 for the fifteen (15) trading days to the close of trade on 6 August 2020, being the last trading day prior to this announcement. Alchemy acknowledges and thanks Veritas Securities Limited in facilitating the Placement as Lead Manager. In addition to their fees as Lead Manager Veritas will also receive 3,000,000 unlisted options on the same terms as the Placement Options (Broker Options).
The Placement has been undertaken using the Company's available placement capacity under ASX Listing Rule 7.1 and 7.1A as follows: 11,614,232 Placement Shares, 16,666,667 Placement Options and 3,000,000 Broker Options pursuant to Listing Rule 7.1
55,052,435 Placement Shares pursuant to Listing Rule 7.1A
Non-Renounceable Rights Issue
Alchemy is also pleased to advise of a pro-rata non-renounceable Rights Issue (Offer) to all eligible shareholders to raise up to $825,787 (before costs). The Offer will be conducted on the basis of one (1) new fully paid ordinary share (Share) for every ten Shares held by eligible shareholders on 17 August 2020. The Shares will be issued at $0.015 per Share along with a one for four free attaching Option exercisable at $0.03 and expiring on 30 September 2022. Shareholdings acquired under the Placement will not be eligible for the Offer. The new Shares issued under the Offer will rank equally with existing Shares. In addition to their entitlement, eligible shareholders may also apply for shortfall.
The Offer will be made under a prospectus to be lodged with ASIC and will shortly be dispatched to eligible shareholders. The prospectus will also available on both the ASX website (www.asx.com.au) and on the Company's website (www.alchemyresources.com.au). Eligible shareholders should consider the Prospectus in deciding whether to acquire Shares under the Offer, and complete the personalised Entitlement and Acceptance Application Form that will accompany the Prospectus. Proceeds from the Placement and Offer will be used for drilling activities within the Overflow and Yellow Mountain Gold-Base Metal projects (NSW), and the Karonie Gold Project (WA) as outlined below.
NSW: Extension diamond drilling at the Overflow Prospect testing the down plunge location of high-grade goldsilver-zinc-lead intercepts returned from previous drilling.
Diamond drilling at the Yellow Mountain Mine Prospect testing a strong IP chargeability high located down plunge of broad gold-silver-copper-zinc-lead intercepts returned from previous drilling.
Surface IP surveys covering parts of the 12km long Melrose hydrothermal magnetite alteration zone.
WA: RC drilling to follow-up gold intercepts recently received from the Parmelia and Taupo prospects and to drill test gold targets at the Gilmore, Aldiss, Batavia, and Esplanade prospects.
RAB drilling across prospective parts of the Claypan Shear Zone along strike from the Breaker Resources NL's (ASX: BRB) Bombora deposit in order to identify gold mineralisation beneath shallow alluvial cover.
The Directors may extend the Closing Date by giving at least three (3) business days' notice to ASX prior to the Closing Date. As such the date the new Shares are expected to commence trading on ASX may vary. An Appendix 3B for the Placement and Offer is attached.
Proceeds from the Offer will be used to advance the Overflow and Yellow Mountain Gold-Base Metal Projects in the Cobar Basin of NSW. The projects form part of a Farm-In and Joint Venture with Heron Resources Ltd (ASX: HRR) where Alchemy has earned a 51% interest in eight licences, and can earn a further 29% interest by spending $0.35M before 30 May 2021. The projects are close to operating mines and emerging deposits in the Cobar Basin including Hera, Nymagee, Federation (Aurelia Metals Ltd - ASX: AMI), and Mallee Bull, Wagga Tank, Southern Nights (Peel Mining Ltd - ASX: PEX).
Diamond drilling targeting the down plunge extension of high-grade gold-silver-zinc-lead mineralisation intercepted by Alchemy and previous explorers is planned at the Overflow Prospect. Drilling will also be conducted at the Yellow Mountain Mine Prospect testing a strong IP chargeability high located down plunge of previous broad gold-silver-copper-zinc-lead drill intercepts. Mineralisation at the prospect is interpreted to be an exhalative, stratabound VMS system with a structurally controlled gold-silvercopper mineralisation overprint associated with quartz veins in high strain zones. 3D analysis of the historic drilling results and the IP data suggest the conductivity high could represent the down plunge component of a NE-plunging ore shoot. A deep diamond hole has been planned with drilling due to commence Q4 2020, subject to statutory approvals.
A recent review of the Yellow Mountain open file data identified a highly prospective exploration target adjacent to the Gilmour Suture, a crustal scale structure associated with several gold deposits in the district, including the Cowal gold mine (current resources 8.6Moz1 ) owned by Evolution Mining Limited (ASX: EVN). The target is a 12km long hydrothermal magnetite alteration zone (Melrose magnetite anomaly) with chemical signatures similar to porphyry Cu-Au systems elsewhere in Australia and overseas including the CadiaRidgeway system. Historic data shows that the majority of the Melrose magnetic anomaly has not been covered by previous IP surveys, and Alchemy intends to conduct IP surveys over these areas to better define targets for drill testing. Porphyry copper-gold and geochemistry experts are also being consulted to help define drill targets within this large highly prospective alteration zone.
Alchemy has built a significant land package in the Karonie greenstone belt in the Eastern Goldfields region in Western Australia, and plans to conduct further drilling on this Project in the coming 12 months. The Karonie Project now includes eleven exploration licences and three exploration licence applications covering 1,209km2 of highly prospective mineralised structures within Kurnalpi Terrain greenstones 90km east of Kalgoorlie. The tenements are located along strike of Silver Lake Resources Ltd's (ASX: SLR) Karonie/Harry's Hill and French Kiss deposits (reserves/resources of over 579,000oz @ 2.1g/t Au)2 , are within 50km of Silver Lake's Randalls processing plant, and cover 36km of the under-explored, gold endowed Claypan Shear Zone commencing just 12km along strike to the south of Breaker Resources NL's (ASX: BRB) Bombora deposit (Indicated and Inferred resource of 23.2Mt @ 1.3g/t Au for 1.0Moz)3 .
Proceeds from the Offer will be used to follow-up gold intercepts recently received from the Parmelia and Taupo prospects located immediately along strike of Silver Lake Resources Ltd's (ASX: SLR) Aldiss Mining Centre, and to test gold targets at the Gilmore, Aldiss, Batavia, and Esplanade prospects. Targeted RAB drilling will also be conducted across the Claypan Shear Zone along strike from the Bombora resource in areas of magnetic highs that potentially represent the preferred host rock to gold mineralisation, and across jogs interpreted from aeromagnetic images that can be preferred sites for hydrothermal gold mineralisation.
Alchemy's Managing Director, Leigh Ryan, said: 'This capital raising will enable the Company to complete drilling at Overflow, drill test several very prospective gold and base metal targets at our Yellow Mountain Project and continue our drilling at the Karonie Gold Project. We're also very excited about advancing our geochemical, geological and geophysical understanding of the extensive Melrose porphyry copper-gold target. The drill programs are expected to commence shortly, and we look forward to updating the market as results from these programs are received.'
Contact:
Tel: +61 8 9481 4400
Email: Leigh@alchemyresources.com.au
