Vital Metals (ASX: VML) has raised around A$637,487 in a recent non-renounceable rights offer to advance its Watershed Tungsten Project and Doulnia Gold Project.
The company undertook a capital raising comprising the issue of up to 57.2 million shares at $0.05 each, on the basis of one new share for every four held, to raise $2.8 million.
Vital Metals has entered into mandate agreements with Melbourne Capital and Fairfax I.S., which will place the remaining 44.4 million shares on a "best endeavours" basis.
The company has identified potential to expand the Watershed Tungsten Project in Queensland after a regional assessment of historical exploration data turned up a potential satellite deposit.
A Definitive Feasibility Study (NYSE:DFS) is underway at Watershed, and is due for completion in the December quarter of 2012.
The DFS is being fully funded by Japan Oil, Gas and Metals National Corporation (JOGMEC) in order to earn an interest in the project.
JOGMEC will spend $5.4 million over two years to fund the completion of a Bankable Feasibility Study in order to earn a 30% stake in the project.
Vital Metals is targeting construction at Watershed in 2013 and production by 2014, meaning the project is well placed to take advantage of rising tungsten prices, with the price of the commodity rising more than 30% in 2011.
Meanwhile, the company continues to receive stellar gold results from drilling on the Kollo Gold Prospect, part of the Doulnia Tenement in Burkina Faso.
The latest results, which include a project best gold intercept of 5 metres at 60.36 grams per tonne (g/t) from 75 metres, including 2 metres at 128.5g/t, and 15 metres at 7.75g/t from 105 metres, have continued the trend of high grade gold mineralisation at Kollo.
Mark Strizek, managing director, previously told Proactive Investors with bonanza grades of 5 metres at 60.36g/t gold, including 2 metres at 128.5g/t, being returned from the Kollo Prospect, the project could be geologically similar to the nearby high grade 1.1 million ounce Poura mine.
Gold mineralisation at the prospect is shallow, less than 100 metres deep, and open at depth and along strike.
There is over 3 kilometres of strike length at Kollo, with active artisanal mining along trend. Importantly, a sizeable area of the trend remains untested, offering potential for further gold discoveries.
Vital is now working towards defining a maiden JORC Resource for the Kollo Prospect in 2012.