Spartan Resources has secured A$25m ($16.18m) in firm commitments to support exploration work at its 100%-owned Dalgaranga gold project in Western Australia (WA).

The company received firm commitments from institutional investors through a placement.

The placement will involve issuing around 62.5 million new Spartan shares at an offer price of A$0.40 apiece.

Spartan plans to use the proceeds, together with its existing cash balance, for exploration and studies, as well as to meet care and maintenance costs for the Dalgaranga project.

The company will also allocate A$29.3m for exploration work at the Never Never deposit, including "look-alike" targets and feasibility studies. A further A$2.7m is reserved to meet minimum expenditure commitments.

The company will spend A$8m on the Dalgaranga project’s care and maintenance through to the end of November 2024.

Spartan will allocate A$12m to cover corporate costs and for general working capital, and A$1.2m for transaction and other costs.

Spartan managing director and CEO Simon Lawson said: “The proceeds of this placement, combined with existing cash reserves, will put Spartan in an outstanding position to capitalise on what has been an exceptional year for the company in 2023 and significantly upscale our exploration and resource drilling efforts in the first half of 2024.

“The funds raised will be earmarked to delivering resource growth above the scheduled MRE [mineral resource] update in December 2023, targeting the next leg of resource growth at Dalgaranga and ensuring we can maintain our current exploration momentum.”

Canaccord Genuity (Australia) and Ashanti Capital are serving as joint lead managers to the placement. Herbert Smith Freehills is providing legal assistance.

Located 475km north-east of Perth, the Dalgaranga project includes a fully developed gold mining operation that is currently on care and maintenance.

It also includes an extensive exploration landholding.