The Wonawinta Silver Mine is currently on care and maintenance. Credit: TTstudio via Shutterstock.com.

Australia’s Manuka Resources has secured firm commitments from investors for an A$8m ($5.29m) share placement, aimed at initiating production at the Mt Boppy Gold Mine by 2024.

This placement involves issuing around 133.3 million new shares, with the first doré production expected in the fourth quarter of 2024.

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The new shares are priced at $0.06 each, with the price marking a 13% discount to the company’s stock close on 6 May 2024 and an 18.1% discount to the five-day volume-weighted average price. Each share comes with an option exercisable at the same price, expiring on 15 May 2026.

Manuka noted that the placement will be conducted in three tranches, with the first consisting of around 87.8 million new shares.

Tranches 2a and 2b will require shareholder approval, with the latter also contingent on other conditions and dedicated to Claymore Capital or its nominees.

Funds from the capital raise will establish a gold processing facility at Mt Boppy, with infrastructure such as inline pressure jigs and an intensive leach reactor. The investment also covers tailings dam costs, working capital and contingencies.

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Historically, Mt Boppy’s ore was processed at the Wonawinta Silver Mine, 150km away.

With the upcoming production ramp-up at Mt Boppy, Manuka Resources plans to restart silver production at Wonawinta in 2025, leveraging cash flow from Mt Boppy.

Wonawinta is currently on care and maintenance.

It has a resource of 38.3 million tonnes at 41.3 grams per tonne of silver, including a high-grade component. An updated reserve statement for Wonawinta is expected soon.

Manuka added that it is implementing a staged growth strategy, prioritising gold and silver output and cash flow from its Cobar Basin assets.

It recently completed a sonic drilling programme at Mt Boppy, underpinning a five-year mine plan with projected earnings before interest, taxes, depreciation and amortisation of $19m per annum.