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WPG Resources follows placement with rights issue

Combined with a recent placement, the total raised will be up to $12.6 million.
wpg-resources_challenger-tarcoola-gold-bars-757.jpg
WPG Resources is a South Australian gold miner

WPG Resources (ASX:WPG) will open a 1:8 rights issue priced at $0.048 with a 1:2 attaching option seeking to raise up to $5.4 million.

The rights issue follows the recent oversubscribed placement, which raised $7.2 million.

Funds raised from the placement and rights issue will be primarily used at WPG’s flagship asset, the 100% owned Challenger gold mine located in South Australia.

This will include funding for the Challenger mill expansion, mine development, exploration and for general working capital.

Bob Duffin, executive chairman, commented: “The investment metrics are attractive.”


Rights issue details

The rights issue is non-renounceable and available to eligible shareholders.

The 1:2 attaching options are exercisable at $0.08 and expire 30 June 2019.

Participants in the recent share placement will be able to participate in the rights issue.

Key indicative dates are as follows:

- 27 June: Record date;
- 30 June: Opening date;
- 28 July: Closing date; and
- 4 August: New shares trade on ASX.


Background

WPG owns a number of assets including two producing gold mines all located in the Gawler Craton region of South Australia.

- Challenger gold mine (100%);
- Tarcoola gold mine (100%);
- Tunkillia gold project (100%); and
- Western Gawler Craton JV (~28%).

The Challenger gold mine is WPG’s flagship asset and is aiming to produce 50,000 ounces of gold in FY17.

A mill expansion study is underway and drilling programs continue at the gold mine.

Tarcoola is an open pit operation and gold ore has been trucked by road to the Challenger processing plant since January 2017.

Tunkillia is a pre-development asset with a JORC resource with a definitive feasibility study (DFS) to be advanced later in 2017.

Finally, the Western Gawler Craton JV is held jointly with manager Tyranna Resources (ASX:TYX) and hosts inferred resource estimates of 219,000 ounces of gold within trucking distance of Challenger.

 

Recent resource increase

Earlier in June, WPG increased its JORC resource estimates by 27% at its flagship 100% owned Challenger gold mine located in South Australia.

Due in part to successful drilling campaigns; the resource now stands at 1.4 million tonnes grading 7.6 g/t gold for 343,299 ounces of gold.

Challenger’s JORC resources have been growing since 2015 which is evidence of WPG’s intensive focus on underground exploration at Challenger, which has the potential to deliver further increases in the resource inventory, and also the life of the mine.

Furthermore, the resource estimate ignores the 162,000 ounce Exploration Target for the SEZ and M3 shoots and the results of the exploration drilling programs in the Challenger Deeps area.

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