Toubani Resources (ASX: TRE) will have a solid chunk of new cash in the bank to drive its Kobada gold project in West Africa to the definitive feasibility study (DFS) stage after confirming a successful $10 million fundraising.
The company says it has received binding commitments for a two-tranche placement totalling $10 million to take Kobada to the DFS stage and beyond as it aims to advance the project to shovel-ready status. The offer includes 58.8 million shares priced at 17c each – a 5.6 per cent discount to its last closing price and a 10.1 per cent shaving off its 10-day volume-weighted average price (VWAP) of 18.9c per share.
Leading Australian fund manager Paradice Investment Management, which has been operating for the past 24 years and also has a United States base in Denver, has subscribed for new shares through one of its funds that will bring its holding in Toubani to a healthy 9.9 per cent upon completion of the offer.
The company says the placement received a significant show of support from several local specialist resource funds, existing and new international investors and retail shareholders, while three directors have also subscribed for 1 million shares worth $170,000 in a display of faith in the company’s strategy. The issue of shares to managing director Phil Russo and directors Matt Wilcox and Scott Perry will need to be approved by shareholders at a general meeting scheduled for October.
The tranche-one stage will see 42.2 million shares issued to raise $7.2 million under Toubani’s existing placement capacity, with the shares expected to be issued on August 28. The second tranche for $2.8 million is subject to be approved at the October meeting.
We are well positioned to advance our compelling West African gold development project and look forward to delivering an updated feasibility study for Kobada in the coming months. Toubani’s dual-track strategy of advancing Kobada to shovel-ready status while pursuing resource growth opportunities offers an exciting future for the Company and our shareholders.
Toubani Resources Managing Director Phil Russo
Management says using the new funds to complete the DFS will define Kobada as one of the biggest oxide gold development projects in West Africa, on the back of the State of Mali’s recent implementation of a supportive new mining code. Toubani says the adoption of the 2023 Mali Mining Code reaffirms the Republic’s commitment to mining and its desire to once again become one of West Africa’s top gold producers.
Under the new code, the Mali Government will take a 10 per cent interest in all new mining projects, with an option to buy an additional 20 per cent within the first two years of any commercial production. Locals immediately affected by mining-related activities may also share in an additional 5 per cent interest that may be relinquished by the company.
In addition to the DFS, management has indicated that the new funds will be used for a reverse-circulation (RC) drilling program that will unleash the drill bit on a range of high-priority satellite targets to define additional oxide material. A diamond-drilling campaign is then expected to follow to test the depth potential of mineralisation below the existing deposit, as the average depth tested by drilling to date is only about 110m.
The company also plans to update all permitting, finalise required in-country agreements and advance outstanding environmental and social activities. It is also planning for post-DFS optimisation studies, with the balance of funds set out for corporate costs, general working capital and to cover the placement costs.
Toubani is in the envious position of having a highly-experienced board and management with a proven track record in Africa, having advanced projects through all the various stages including exploration, development and production. The company recently secured the services of experienced West African gold operator Wilcox, who joined the board as a non-executive director.
Wilcox managed the full development of Tietto Minerals’ Abujar project in Côte d’Ivoire and its gold operations before the company was the subject of a successful takeover by Chinese giant Zhaojin Mining. He previously oversaw the team that constructed and commissioned the Abujar gold plant on time and below budget and he also led the construction of West African Resources’ Sanbrado gold mine in 2020.
With the right team leading the charge and the required funds now in place to complete its mission, Toubani may well be on the path to West African success.
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