Zenith Minerals has secured a significant investment of $7.65 million from Perth-based strategic gold investor Ida Metal Investments. This investment marks Ida as the new largest shareholder, acquiring a 10 percent stake in the company at a premium price. The shares were purchased at 12.75 cents each, representing a 15.9 percent premium to the market price.
The investment is subject to approval at a shareholder meeting scheduled for mid-November 2023. Although awaiting this endorsement, the influx of capital is anticipated to enhance Zenith’s financial position significantly. The funds will support Zenith’s ongoing exploration efforts, particularly at its Dulcie gold project located in Western Australia’s South Cross goldfields and the newly discovered intrusion-related gold system (IRGS) at the Red Mountain project in Queensland.
Andrew Smith, managing director of Zenith Minerals, expressed optimism about the deal, stating, “Today’s announcement renders the company exceptionally well-funded to continue resource growth at Dulcie beyond the current approximately 300,000-ounce mineral resource and to really ‘get after’ Red Mountain.” The placement is expected to facilitate increased drilling activities and accelerate resource growth at Dulcie, which currently boasts a resource of 302,000 ounces of gold.
Recent drilling results from Red Mountain have generated excitement in the market, particularly a notable intercept of 139.7 metres at 1.05 grams per tonne (g/t) gold, including sections of 14.2 metres at 4.62 g/t and 9.45 metres at 5.29 g/t. These findings suggest the potential for a multi-million-ounce IRGS system, further driving investor interest.
Zenith is preparing for an intensive reverse circulation drilling program, expecting to drill between 9,000 metres and 12,000 metres at Dulcie before the end of the year. The funds from Ida Metal will also support a focused drilling campaign at Red Mountain, anticipated to include 10 to 15 holes, with additional diamond tails and metallurgical studies to follow.
Ida Metal Investments has established itself in the gold sector by investing in projects with proven potential and a clear path to production. Zenith’s advanced Dulcie project, which contains an 8.2 million tonne resource averaging 1.15 g/t gold, aligns well with Ida’s strategic objectives. The funds from this recent placement are expected to be pivotal in advancing early development studies at Dulcie, particularly as the company explores various targets within the project area.
The timing of Zenith’s capital raise aligns with rising gold prices, positioning the company advantageously in a competitive market. With a robust cash reserve and an aggressive drilling strategy, Zenith Minerals is poised for significant growth in a sector that has seen considerable activity over the past five years.
As the company moves forward, it remains focused on optimizing its exploration efforts at both Dulcie and Red Mountain, aiming to unlock further value for its shareholders.
