- Consolidated Zinc (CZL) has successfully raised the target of around $1.72 million to fund exploration at its Plomosas project
- Operations at Plomosas had been suspended for weeks during pandemic closures, but have now ramped back up again
- $600,000 is slated for further gold exploration at the promising project
- The rest of the money will be used to fully repay loans, and for working capital and administration fees
- The Plomosas operation has been streamlined during the lockdown, so it is now operating at better margins and fully funded for further exploration
- Consolidated Zinc closed grey on Friday, with shares trading for 0.5 cents each
Consolidated Zinc (CZL) has successfully raised the target of around $1.72 million to fund exploration at its Plomosas project.
Oversubscribed and scaled back
The fully-underwritten non-renounceable entitlement offer was oversubscribed with the shortfall applications received, and the company had to apply a scale-back.
Shareholders were able to apply for one new share for every three shares held at a price of 0.3 cents per share.
Each new share would come with one free-attaching option, exercisable at 0.6 cents within three years of the issue date.
Funding runway
The money is to be spent largely on the company’s Plomosas project in Mexico.
Operations at Plomosas had been suspended for weeks during pandemic closures, but have now ramped back up again.
$600,000 is slated for further gold exploration at the promising project.
A further $400,000 will be used to pay off unsecured loans to major shareholders, the Copulos Group and the Retzos Group.
Both companies are taking up their full entitlements under the offer, so this loan amount will be offset against the entitlement monies owed, and no interest will be payable by CZL. This sum represents a repayment of the loans in full.
The remaining money raised will be used for administration fees for the offer, and for working capital.
With the successful completion of the offer, CZL must be breathing a little easier. When Plomosas was first closed for business, it was unsure when and how the operation might reopen.
The company did some work to streamline operations, so it’s expected the project will operate with better margins after the restart, and the company is now fully-funded to continue to explore the promising region.
Consolidated Zinc closed grey on Friday, with shares trading for 0.5 cents each.