Auzex Resources (ASX: AZX) is to raise up to A$3.7 million by a placement and rights issue to provide the company with a strong financial platform to advance the Bullabulling Gold Project in Western Australia.
John Lawton, managing director, said the proceeds of the placement and the rights issues will be used to undertake exploration activities at the Bullabulling Gold Project, where the company, in joint venture with Central China Goldfields PLC (LON:GGG), intends to fast-track a feasibility study into the development of the Project over the next 12 to 18 months.
A$0.9 million will be raised through a placement at A$0.12 per share to institutional and sophisticated investors, and the placement was oversubscribed.
A major international resources fund has taken a cornerstone investment in the placement. Renounceable rights issues are to be offered to eligible shareholders and optionholders.
Placees will receive an attaching option for every three shares subscribed. These options have an exercise price of A$0.20 and will expire on 13 February 2012.
Shares issued under the placement rank equally in all respects with existing shares.
Renounceable rights raising up to A$2.8 million will be offered on the same terms as the placement, to both Auzex's current shareholders (including subscribers under the Placement) and holders of AZXO listed options.
Auzex has just commenced a diamond drilling program at Bullabulling to intersect known mineralisation over a 2.5km portion of the Bullabulling Trend between Bacchus and Phoenix pits.
Drilling at Bacchus previously intersected gold mineralisation with intercepts of 7m @ 77g/t Au, 5m @ 14g/t Au, 4m @ 5.08g/t Au, 3m @ 4.43g/t Au, and 3m @ 9.16g/t Au beneath the existing Bacchus Pit. This mineralisation remains unmined and is not included in the current JORC resource estimate.
Seven drillholes are planned totalling 1,432m.