Astral loads up for final investment decision on Kalgoorlie gold

Astral Resources receives strong support for placement on Kalgoorlie gold development.

The AAR war chest is now full enough to take it through to a final investment decision. Pic: Getty Images

• Strongly backed $25m placement enough for prefeasibility and definitive studies over AAR’s Mandilla flagship

• 38Moz accumulated across Mandilla and Feysville

• Series of upcoming announcements expected on resource expansion

• Gold prices remain hovering around record highs

 

Special Report: Astral racks up the funds to advance a large collection of Kalgoorlie ounces marked for continued expansion.

The Astral Resources (ASX:AAR) accounts have been loaded up to take the company through to a final investment decision of the Mandilla gold project, which is a short hop southbound from Kalgoorlie in Western Australia.

A strongly backed $25m placement will accelerate exploration and evaluation of both the Mandilla and Feysville projects near Kal, across which Astral has accumulated resources of 1.38 million ounces of gold, now trading at or around record highs.

The placement, done at a 5% discount to AAR’s 30-day volume-weighted average price, received strong demand from new and existing investors both domestic and abroad.

Tranche 1 raised around $21 million of the total, with the second (including an issue of new shares) set to account for the remainder of a total that’s enough to lodge both the pre and definitive feasibility studies over Mandilla.

Astral’s managing director Marc Ducler said the company was delighted with the strong support.

“The calibre of new investors we were able to attract and the quantum of funds we were able to raise is testament to the quality of the Mandilla Gold Project as one of Australia’s best near-term gold development stories,” Ducler said.

“Proceeds from the Placement will enable Astral to accelerate exploration and evaluation activities at both Mandilla and Feysville in order to unlock the genuine potential of these projects.

“Furthermore, the Placement will see Astral funded through to completion of the Mandilla DFS.”

Ducler added he would like to extend appreciation to new and current shareholders on behalf of the Astral Board and management.

Growing gold

It feels like a small eternity since then Australian Treasurer Peter Costello was lauded (by some) in 1997 for selling off two thirds of the nation’s gold reserves at a price of US$306 an ounce.

There was belief that gold no longer had a large role to play in international finance, a credence since relegated to the aether with a continued presence as a safe haven investment and a trading price now sitting beyond US$2650 a pop.

With a lower barrier to entry compared to other minerals, even much cheaper ounces have been able to sustain companies’ profits with underlying economics on a smaller scale.

There are heady profits to be made from smaller collections than Astral’s, and the company anticipates a series of milestone announcements over the coming months to swell its resources before reaching a final decision over a Mandilla flagship already standing as the largest predevelopment open pit held by an ASX junior across the entire Goldfields.

This article was developed in collaboration with Astral Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Astral loads up for final investment decision on Kalgoorlie gold