Spartan Resources has announced a fully underwritten A$80m ($51.3m) equity-raising initiative to fast-track the exploration and development of the Dalgaranga Gold Project in Western Australia (WA).

This fundraise comprises an institutional placement aimed at garnering around A$47m and a one-for-17 pro rata accelerated non-renounceable entitlement offer that is expected to rake in around A$33m.

The Dalgaranga Gold Project is situated 475km north-east of Perth and roughly 65km north-west of Mt Magnet.

It encompasses a fully developed gold mining operation currently on care and maintenance, and a significant exploration landholding.

The mine produced 71,153oz in the 2022 financial year before operations were paused in November 2022 to allow for strategic planning and financial restructuring.

The equity raise will be conducted at a fixed offer price of A$0.58 per share, which is an 11.5% discount to the last stock close and a 5.7% discount to the five-day volume-weighted average price.

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This move will introduce nearly 138 million new shares, equating to around 14% of the existing Spartan shares.

The proceeds from the equity raise are earmarked for a substantial exploration campaign at Dalgaranga in 2024/25.

Spartan plans to allocate A$29m for accelerated resource extension drilling at key sites and $6m to advance feasibility and optimisation studies.

Another A$38m is designated for underground exploration, with activities expected to commence in August 2024, bringing development close to the Never Never orebody.

Furthermore, A$9m will enable Spartan to begin early works before a restart final investment decision, while A$24m will cover care and maintenance costs, corporate expenses and working capital. Transaction costs are estimated at A$4m.

Canaccord Genuity, Sternship Advisers and Euroz Hartleys are serving as underwriters and joint lead managers for the equity raising, with Herbert Smith Freehills providing legal advice to Spartan Resources in this endeavour.

Spartan managing director and CEO Simon Lawson said: “This is a landmark capital raising for Spartan, which puts the company in an exceptional position to deliver on the huge potential of the Never Never discovery and our other recent exploration successes at Dalgaranga.

“The proceeds of this capital raise will ensure we have the balance sheet strength to progress our robust and thorough restart plan, and the financial flexibility to commence early works in advance of the restart decision.”