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Alkane Resources Ltd. (ALK), an Australian company exploring for gold and rare earths, aims to raise about A$100 million ($108 million) selling shares to help fund a new gold project in New South Wales.
The company wants to raise as much as A$30 million through a rights offer to existing holders and the balance by a sale to investors, Ian Chalmers, managing director of Perth-based Alkane, said today in a phone interview.
The company, whose stock was halted yesterday, will make a statement on the sale before trading resumes tomorrow, Chalmers said. The share sale is part of the company’s planned A$1 billion capital raising program to fund its two biggest projects over the next few years, including a A$893 million zirconium and rare earths development, he said.
Alkane, which last produced gold in 2005 from its Peak Hill mine in New South Wales, plans to use as much as A$70 million of the sale proceeds for the Tomingley gold project that’s set for first production in the next 12 months, said Chalmers. About A$20 million will be allocated for the zirconium project near the town of Dubbo, also in New South Wales, he said.
Alkane shares fell 6 percent to A$1.25 on Feb. 27 before trading was halted. They’ve dropped 30 percent in the last six months.
Zirconium is used in ceramic and refractory compounds as an alloying agent and in nuclear reactors as a corrosion-resistant alloy.
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