Kaoko Metals has raised A$20 million to accelerate drilling at its Chalkos Copper-Silver Project in north-western Namibia, including mobilising a second diamond drill rig after its first two holes encountered broad zones of visible copper mineralisation at the Otniel prospect.
The ASX-listed explorer said on Monday it had received firm commitments from new and existing institutional, professional and sophisticated investors for 9,090,910 new shares at A$2.20 each, raising A$20 million before costs.
The placement, together with Kaoko’s existing cash, is expected to leave the company with more than A$24 million in cash before offer costs, giving it substantially more funding to expand exploration at both Chalkos and its Karibib Gold-Copper-Tungsten Project.
The raising comes just four months after Kaoko listed on the ASX on 7 May following an initial public offering that raised A$6.5 million at A$0.20 per share.
The A$2.20 placement price is 11 times the IPO issue price, although it represents a 12% discount to Kaoko’s A$2.50 closing price on 3 September. It is also a 20.2% premium to the company’s 15-trading-day volume-weighted average price of A$1.83.
Kaoko said new and existing long-only global institutions and sophisticated investors strongly supported the placement.
“We are delighted with the high level of inbound demand for the Placement, which has introduced several high-quality, long-only, institutional investors to the Kaoko register. The response reflects the significance of the early observations from our first diamond drill holes at Otniel, announced last week,” managing director Gerard O’Donovan said.
Second rig for Chalkos
Kaoko plans to use the new funding to expand and accelerate diamond drilling at the Otniel and Donkey Hill prospects, including bringing a second diamond rig onto the project.
The company started its maiden Chalkos drilling programme in August after awarding Optimine Exploration & Drilling Namibia a contract for an initial 2,000 to 3,000 metres of diamond drilling at Otniel and Donkey Hill.
Kaoko has not yet disclosed how many additional metres it will drill under the expanded programme.
“These funds allow us to move decisively to bring a second diamond rig to Chalkos and, expand drilling at the priority Otniel and Donkey Hill prospects. We will also be able to pursue more immediate systematic testing of the broader mineralised systems across our 400km2 licence area. In parallel we will advance Karibib with geophysics ahead of a maiden drilling program,” O’Donovan said.
The decision follows early observations from the first two holes at Otniel.
DDOT002 encountered 60.25 metres of visible copper mineralisation from 36.65 metres to 96.90 metres down-hole, including 32.36 metres described by Kaoko as strong visible mineralisation.
DDOT001 encountered 51.83 metres of visible copper mineralisation from 39.27 metres to 91.10 metres, including 17.2 metres of strong visible mineralisation.
The results remain visual observations, not laboratory-confirmed copper grades. Kaoko cautioned that visual estimates cannot determine copper grade, with samples from the first two holes undergoing laboratory analysis.
Both holes were also drilled from the same drill pad, meaning they had not yet demonstrated how far the mineralisation extends laterally. Subsequent holes are designed to test continuity and extensions of the mineralised system.
Wider search for copper
The new funding will allow Kaoko to move beyond the immediate Otniel and Donkey Hill targets and undertake a broader exploration programme across approximately 400 km².
The work will include detailed mapping, geochemical sampling and geophysics aimed at generating additional drill targets.
Earlier exploration has already identified the Bootless prospect between Otniel and Donkey Hill and extended mapped surface copper mineralisation at the two established prospects.
“We are still at the early stages of understanding the vast potential of the Chalkos Project and look forward to what drilling may uncover,” O’Donovan said.
Despite the encouraging visual intersections, Chalkos remains an early-stage exploration project and does not yet have a mineral resource estimate. Kaoko’s published development sequence places assay results and geological interpretation ahead of follow-up drilling and eventual resource definition and technical review.
Karibib gets funding
Part of the placement proceeds will also fund the Karibib Gold-Copper-Tungsten Project in the Erongo Region, where Kaoko holds up to an 85% interest.
Kaoko plans geophysical surveys over priority prospects before an expanded drilling programme, subject to the results of its geochemical and geophysical work.
Recent reconnaissance sampling at Karibib returned values of up to 4.9% copper, 0.85g/t gold and 0.68% tungsten trioxide. However, these were rock-chip samples and should not be interpreted as drill intersections or evidence of a mineral resource.
The company will also use some of the placement proceeds for working capital and transaction costs, and cautioned that its allocation could change depending on drilling results, rig availability and other factors.
Settlement of the placement is expected on 14 September, with the new shares scheduled for allotment and trading on 15 September. Kaoko will have approximately 69.7 million shares on issue following completion.
The placement gives Kaoko more than three times the capital it raised in its May IPO and, more importantly for its Namibian exploration programme, the money to move from a single maiden drilling campaign at Chalkos to two-rig drilling, wider regional target generation and simultaneous advancement of Karibib.
