ASX-listed mining company Cazaly Resources has completed an oversubscribed placement to raise nearly A$2.1m from professional and sophisticated investors.

Cazaly agreed to issue a total of 69.6 million of its shares, each priced at A$0.03 ($0.019).

Simultaneously, it also secured a ‘compelling’ offer from Kobala Investments for the acquisition of 15 million shares in Equinox Resources for A$2.15m. The two companies have agreed to close the deal by 7 January 2024.

Although Cazaly is selling its shares in Equinox, it will retain its royalty in all future production at the Equinox-owned Hamersley iron ore project in Pilbara, Western Australia, at $0.30 per tonne.

Cazaly appointed Barclay Wells as the lead manager for the placement and is entitled to a 6% fee on gross proceeds.

It also agreed to issue five million of its options exercisable within three years, at A$0.045 apiece.

The company intends to use the proceeds from the placement and the sale of Equinox shares, as well as its existing cash reserves, to advance exploration activities at its lithium and rare earth elements (REE) projects in Canada, Namibia and Australia.

Besides, it will use the proceeds for its working capital requirements.

It will also continue with the exploration of other resources across its leading mining jurisdictions.

Cazaly managing director Tara French said: “This capital raising and the opportune sale of the Equinox holding puts the company in a very strong position to accelerate its work on key lithium and rare earth assets.

“Cazaly’s pipeline of exciting critical mineral projects presents excellent opportunities for new discoveries to create value for our shareholders. We very much appreciate the support of all new and long-standing shareholders and I look forward to keeping the market updated with our progress.”

The company owns a total of eight projects. Of these, two are lithium projects, namely the Sundown project in Canada and the Kaoko project in Namibia, and two are REE projects, namely Abenab North in Namibia and Carb Lake in Canada.

The other four projects include the Halls Creek project in South Africa, the Ashburton gold project, the McKenzie Springs nickel and graphite project, and the Mt Venn gold project in Australia.