Andean Silver has secured firm commitments to raise A$25m ($16.92m) through a share placement, earmarked for exploration work at the Cerro Bayo Silver Project in Chile.

This placement involves the issuance of more than 23.8 million shares at A$1.05 each, with the price marking a 10.3% discount to the last stock close of A$1.17 on 16 September 2024.

The funds raised will be directed towards resource conversion and exploration activities at Cerro Bayo, with a plan to increase the number of drill rigs on-site to four. This will focus on both brownfield and greenfield targets.

This financing will also be used to meet general working capital needs.

The placement was managed by Canaccord Genuity (Australia) and Euroz Hartleys as joint lead managers and joint bookrunners, while SCP Resource Finance served as the co-manager.

Settlement of the placement is scheduled on 25 September 2024.

Andean Silver owns a 100% stake in the Cerro Bayo mine, which covers 285km² and comprises more than 70 contiguous exploration concessions. It also includes surface properties covering the areas of the Laguna Verde mining district and processing facilities.

The project was in production for over 15 years and produced more than 45 million ounces (moz) of silver and 650,000oz of gold (around 99moz AgEq).

Since October 2022, the project has been on care and maintenance.

Andean Silver CEO Tim Laneyrie said: “The proceeds of this placement will mean we can add extra firepower to discovery and resource conversion with up to four drill rigs on-site over the coming months.

“We remain on target to deliver our next mineral resource upgrade in the first quarter next calendar year and look forward to future results from Pegaso 7, Droughtmaster, Cristal and multiple other prospects.

“We have demonstrated the potentially significant scale of Cerro Bayo at a time when the demand for silver is increasing and stockpiles are being drawn to meet the demand in areas such as solar panel construction.”