Toubani Resources has secured binding commitments to raise A$10m ($6.73m) in a two-tranche placement, aimed at advancing its Kobada gold project in Mali.

The placement’s tranche one, which will raise A$7.2m, comprises the issue of 42.2 million new shares at A$0.17 each.

Under the second tranche, the company will issue 16.6 million new shares to raise A$2.8m.

The first tranche is expected to settle by 27 August 2024 and the second tranche is subject to shareholder approval at a general meeting scheduled for October 2024.

Company directors plan to subscribe for one million shares under the second tranche.

The offer price of A$0.17 per share marks a 5.6% discount to Toubani’s last traded price on the Australian Securities Exchange and a 10.1% discount to the ten-day VWAP [volume-weighted average price].

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This placement, which saw support from institutional and sophisticated investors, will fund the completion of a definitive feasibility study and other activities to bring the Kobada gold project closer to shovel-ready status.

It will also support resource growth through RC [reverse circulation] drilling of high-priority satellite targets and directional drilling to test the depth potential below the Kobada deposit.

Post-DFS optimisation studies and corporate costs, including general working capital and costs of the placement, will also be covered by the proceeds.

Toubani managing director Phil Russo said: “We are humbled by the support received from existing and new shareholders as we welcome several new high-quality institutions to Toubani.

“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 shovelready status while pursuing resource growth opportunities offers an exciting future for the Company and our shareholders.”

Canaccord Genuity (Australia) and Wallabi Group were joint lead managers and bookrunners, with Euroz Hartleys serving as co-manager for the placement.