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Murray Ward
Flagship Minerals has secured firm commitments for A$2.75 million in a strategic placement to fast-track its newly upgraded flagship Isidora gold project in Chile. The key capital raise will directly fund upcoming technical workstreams and engineering feasibility studies.
The company’s fresh shares have been priced at 25c each, representing a tight two per cent discount to the company’s closing price of 25.5c on May 19.
Highlighting the serious institutional weight behind the funding, global mine engineering giant Shandong Xinhai Mining Technology & Equipment has committed A$500,000, subject to shareholder approval. This adds to the $2.5 million that Xinhai had already shelled out in the company’s December placement.
‘The continued support from Xinhai further strengthens our strategic relationship.’
Flagship Minerals managing director Paul Lock
A mystery European investor has also thrown its heft behind the explorer with a major A$2 million commitment, alongside other sophisticated investors that chipped in A$200,000.
Flagship Minerals managing director Paul Lock said: “We are pleased to secure support from three strategic long-term investors aligned with the Company’s development strategy, a further endorsement of the 2.1Moz Isidora Gold Project.”
Flagship says the fresh funds were raised on the back of a recent transformational resource update at its cornerstone Isidora gold project, formerly known as Pantanillo, which officially vaulted the company into the multi-million-ounce gold club. The resource has now been lifted to a substantial 115.2 million tonnes at 0.56 grams per tonne gold for a contained 2.1 million ounces of gold.
In a brilliant piece of value creation, Flagship managed to double the size of its gold resource without the usual multi-million-dollar drilling bill attached.
Rather than launching straight into an expensive exploration campaign, the company took a far smarter approach by reassessing an enormous historical dataset inherited from mining giant Anglo American, which previously held the ground.
The treasure trove of legacy data, which the company estimates would have cost more than A$30 million to replicate, included almost 33,000 metres of drilling from 183 drill holes, featuring nearly 19,000 assays, 13,939 metres of diamond core and more than 2100 surface geochemical samples.
However, by forensically reworking the historical information, Flagship was able to unlock a massive 100 per cent increase in JORC-compliant resources without spinning a single fresh drill bit.
Flagship says that more than 90 per cent of the total contained gold ounces sit comfortably within the high-geological-confidence, measured and indicated resource categories, giving the company a much easier pathway for future mine planning.
Isidora sits in a premium mining zip code within Chile’s prolific Maricunga gold belt, a globally recognised jurisdiction hosting several world-class operations.
The project sits immediately adjacent to recent regional development success stories, notably Rio2’s nearby 4.8-million-ounce Fenix gold mine. The new large-scale heap-leach operation achieved its first gold production earlier this year and appears to be serving as a highly encouraging commercial benchmark for Flagship’s own pathway to production.
While the cornerstone gold drive is the immediate focus, Flagship also holds the prospective Rosario copper and silver project in Chile’s central copper belt.
Flagship says it will allocate the new cash across four areas, with A$750,000 earmarked for targeted drilling and metallurgical studies, estimated to cost a further $500,000. Another A$750,000 will fund broader, comprehensive project-related studies, while the final A$750,000 is targeted for general working capital.
Armed with fresh institutional backing, a high-confidence resource base in the bag, and a clear pipeline of upcoming processing results, Flagship looks to be perfectly positioned to keep the ball rolling at Isidora.
For a junior explorer, it is a rare combination of scale, funding and momentum. And with Chile’s Maricunga belt rapidly emerging as one of the world’s hottest gold development districts, punters will no doubt be watching closely for the next batch of heap leach studies to drop from deep in the heart of Chilean gold country.
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