Magnetic Resources has secured firm commitments to raise A$10m ($6.92m) in a placement to sophisticated and institutional investors to aid commercialisation of its Lady Julie Gold Project (LJGP) near Laverton, Western Australia (WA).

The single-tranche placement, which was oversubscribed, will fund resource definition drilling, deeper drilling for resource expansion, exploration drilling and ongoing feasibility work.

These proceeds will also be used to fulfil general working capital requirements.

The placement was backed by both new and existing investors, which include various specialist resources funds.

It involves the issuance of eight million new fully paid ordinary shares at A$1.25 apiece.

This price marks an 8.4% discount to the last close on 25 September 2024 and a 9.2% discount to the five-day volume-weighted average price.

Argonaut Securities was the sole lead manager for the placement.

Magnetic managing director George Sakalidis said: “The company continues to expand the gold resources at the South Laverton project, and on behalf of the Magnetic Board, I would like to thank our existing shareholders for their ongoing support and welcome new shareholders as we continue to expand the highly promising Lady Julie Gold Project.

“The Lady Julie Gold Project in Laverton continues to expand in size, and with an increasing gold price, the company continues to be excited by the potential for a financially robust low-cost, high-margin gold production.

“Funds from this raising will allow the company to continue to drill for deeper resource extensions at the same time as advancing feasibility work with the view to establishing a long mine life.”