Genesis tops up ahead of FID

Genesis Minerals is raising A$11 million via a placement and share purchase plan as it works towards a final investment decision for its Ulysses gold project by the end of the year (reports MiningNews).
23rd April 2021
Resources Rising Stars

Genesis Minerals is raising A$11 million via a placement and share purchase plan as it works towards a final investment decision for its Ulysses gold project by the end of the year (reports MiningNews).

The company received firm commitments for a placement of 166.7 million shares to raise $10 million.

Major shareholder Alkane Resources will subscribe for up to $2.1 million worth of shares to maintain its 19.8% stake, subject to shareholder approval.

The issue price is 6c per share, a 4.8% discount to the last closing price.

Argonaut Securities acted as lead manager.

Genesis will seek to raise a further $1 million via a share purchase plan at the same price.

The company had $18.3 million at the end of December, but is yet to report its March 31 bank balance.

Genesis plans to use the funds to complete the feasibility study for Ulysses by the end of this quarter and continue exploration.

"Investors can look forward to a two-pronged approach of strong exploration news-flow as we embark on an aggressive drilling push aimed at expanding the existing 1.6Moz resource plus an emerging development story as we complete our feasibility studies," Genesis managing director Michael Fowler said.

"The upcoming exploration program will see 40,000m of RC and diamond drilling aimed at growing the resource to the next level, plus 25,000m of aircore drilling targeting new discoveries within the Ulysses to Orient Well mine corridor and the new Puzzle-Puzzle North corridor."

Genesis is aiming to advance Ulysses, near Leonora in Western Australia, to a final investment decision by the end of the year.

Argonaut analyst Royce Haese has forecast a 1.4 million tonne per annum operation over eight years, based on an assumed mining inventory of 824,000 ounces at 2.18 grams per tonne gold, though he noted exploration success could justify a larger mill.

"The resource base in its current state has the potential to generate strong cashflows when developed and has room to grow," he said recently.

Argonaut has a speculative buy rating for Genesis and an 11.8c price target.

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