- Junior miner Pure Alumina (PUA) has moderately downgraded the mineral resource estimate for its Hargraves prospect in New South Wales.
- The company based its latest review of the prospect’s resource on existing geological work from the deposit
- According to Pure Alumina, the review has revealed a slightly decreased average grade, reported tonnes, and contained metal than originally reported in 2013
- Released in tandem with the new resource estimate is a $2 million capital raising plan
- The company will raise the funds through a share placement and entitlement offer, with new shares priced at 0.9 cents each
- Today, shares in Pure Alumina are trading almost 20 per cent higher and worth 1.9 cents
Junior miner Pure Alumina (PUA) has moderately downgraded the mineral resource estimate for its Hargraves prospect in New South Wales.
The mineral resources at the prospect were last publically stated in 2013. Pure Alumina based its latest review of the resource on existing geological data from the deposit.
The company said when compared to the previously-announced resource, the new data represents a decrease in average grade, reported tonnes and contained metal.
According to the company, the downgrade is the result of the way extreme grade samples were treated in the previous resource model.
Hargraves is part of the Hill End Gold Project, which lies in the Lachlan Ford Belt in New South Wales.
The new estimate
The review outlined a total Resource of roughly 2.3 million tonnes with an average grade of 2.38 grams per tonne of gold for 177,000 ounces.
Importantly, half of this total is an indicated resource, meaning there’s a high level of confidence regarding what lies underground.
When combined with the namesake Hill End prospect in the project area, the company’s resource inventory is now 501,000 ounces at 3.3 grams per tonne of gold.
While the downgrade might be somewhat discouraging, the company said it now has an improved understanding of the area to figure out the most effective way to generate value from Hargraves.
Released in tandem with today’s mineral resource update are plans for a $2 million capital raise.
Pure Alumina will be raising the funds through a share placement and an entitlement offer. New shares will be priced at 0.9 cents each in both parts of the capital raise — a hefty 43.75 per cent discount to Pure Alumina’s last closing price of 1.6 cents per share.
The placement is set to raise roughly $600,000 but is not open to retail investors. One new option will be issued for every two new shares placed under the offer, exercisable at 2.5 cents each by the end of December 2022.
Pure Alumina said it has already received binding commitments for new shares under the placement.
Mum and dad investors will have a chance to scoop up more shares under the three-for-five entitlement offer, however. As with the placement, one 2.5-cent option comes with every two new shares subscribed for, exercisable by the end of December 2022.
Pure Alumina Chairman Tom Eadie said the company was happy to be able to give existing investors a chance to take part in the capital raise.
“The capital raising is a very positive outcome for Pure Alumina, in what is currently a challenging operating and financing environment for many explorations companies given the well-documented impact of COVID-19,” Tom said.
Pure Alumina is planning to raise the full remaining $1.4 million through the entitlement offer.
The company said the money will be used for more gold exploration.
Interestingly, it seems shareholders are currently pleased with the finished Resource Estimate and the confirmed extra funding today.
Shares in PUA are trading 18.75 per cent higher and currently worth 1.9 cents each.