Ausgold has secured firm commitments to garner A$38m ($25.33m) through a placement to further the development of its Katanning Gold Project in Western Australia.

This capital injection will be instrumental in advancing the project towards a final investment decision.

The company will issue around 1.27 billion new shares at A$0.03 apiece under the placement to institutional and sophisticated investors.

This marks a 14.3% discount to the last stock close on 31 May and a 7.68% discount to the 20-day volume-weighted average price.

Funds raised have been earmarked for the completion of the definitive feasibility study, land acquisitions, regional exploration and general working capital needs.

The placement has attracted interest from large institutional investors across the UK, Europe and North America, with significant contributions from existing shareholders.

Notably, Dundee has committed A$3m and Jupiter Asset Management has invested A$7m, increasing its stake from 9.5% to 12.7%.

The investment by Dundee is contingent upon receiving approval from the Treasurer under the Foreign Acquisitions and Takeovers Act 1975 (Cth).

Ausgold executive chairman John Dorward has also shown his confidence in the project by committing to a A$1m subscription, subject to shareholder approval.

Dorward said: “I am enormously excited about Ausgold’s growth potential, leveraging the existing three-million-ounce resource base at the Katanning Gold Project and the company’s large landholding in one of Australia’s great, untapped greenstone belts.

“Subject to shareholder approval, I am pleased to participate in this placement, which will see the company strongly positioned through to a final investment decision.

“Ausgold now has the capital to properly pursue its complementary goals of production and exploration-led growth. I would like to sincerely thank all our existing shareholders who participated in the placement and warmly welcome new investors to our register.”