PERTH (miningweekly.com) – ASX-listed Genesis Minerals has announced a A$19.5-million capital raise to fund the acquisition of the Kookynie gold project, adjacent to its flagship Ulysses gold project, in Western Australia.

Genesis on Wednesday told shareholders it had received firm commitments from professional and sophisticated investors for the placement of 238.1-million shares, at a price of 4.2c each, to raise an initial A$10-million.

The share placement will be undertaken under the company’s existing placement capacity, and will not require shareholder approval.

Genesis was hoping to raise a further A$9.5-million through a one-for-six non-renounceable entitlement offer, also priced at 4.2c each.

Only shareholders registered in Australia, New Zealand, Malaysia or Canada will be eligible to participate in the entitlement offer, which will open on June 29.

The majority of the funds raised will go towards the A$13.5-million acquisition of the Kookynie gold project, which the company would acquire from A&C Mining Investment.

The consideration will consist of a A$3-million upfront cash and share payment, with the balance due within six months, along with a 1% net smelter royalty which has been capped at A$5-million.

Genesis MD Michael Fowler told shareholders that the acquisition significantly advanced the company’s growth strategy in the Leonora district, consolidating its ownership of the southern extension of the Leonora Gold Corridor, including tenements that were immediately contiguous with the southern boundary of the Ulysses gold project, and which cover a 15 km strike length of the Ulysses-Orient Well trend.

The Kookynie tenement package includes a Joint Ore Reserves Committee-compliant indicated and inferred resource of 8.53-million tonnes, at 1.5 g/t gold for 414 000 oz of gold. As a result of the acquisition, the mineral resource in the Greater Ulysses project would now increase to 17-million tonnes, at 2.34 g/t gold for 1.28-million ounces.

“This is an acquisition that ticks every box for us from a strategic, corporate, geological and tactical perspective. It provides the springboard for a significant re-boot of the Genesis story and puts us on a firm growth trajectory towards the establishment of a significant new standalone gold mining and processing operation at Ulysses,” said Fowler.

“We see enormous potential to extend the existing resource down-dip, to find new high-grade lodes just as we did at Ulysses, and to make potential new discoveries and find parallel structures along strike.

“The package being offered also offers vast regional exploration upside, including along the under-explored southern tenement package, providing us with a pipeline of both near-mine and regional exploration targets.”

Fowler said that Genesis would immediately start a feasibility study on developing a standalone operation at Ulysses targeted for completion in the first quarter of 2021.

The study will incorporate the newly acquired resource and assets and would build on the significant work already undertaken at Ulysses.

Funding from the capital raise will also go towards exploration and feasibility work, as well as towards general working capital.