Unusual back-to-back placements at a premium for gold and uranium hopeful Marmota

Wed 07 Sep 22, 3:09pm (AEST)
2011 Geologists sampling rocks in iron ore exploration in the Outback
Source: iStock

Key Points

  • Marmota raised a little over $1m at a 6% premium at the request of a sophisticated investor
  • Marmota operates the Junction Dam Uranium Project and Gawler Craton Gold Project
  • Junction Dam is located approximately 30km away from Boss Energy's Honeymoon Uranium Project, due to recommence production in the December quarter of 2023

It's rather unusual for a company to be able to raise capital at a premium.

It's even more unusual when its two back-to-back placements that occurred just seven business days apart.

Enter gold, copper and uranium explorer Marmota (ASX: MEU).

When an investor says "take my money"

At the request of a sophisticated investor, Marmota raised:

  • 29 August: $556,500 at an issue price of 5.3 cents (premium to current share price of 5 cents)

  • 6 September: $500,000 at an issue price of 5.3 cents (premium to current share price of 5 cents)

The placements included one attaching unlisted option for every two new shares subscribed, exercisable at 10 cents expiring 28 July, 2024.

Marmota had a cash balance of $2.16m based on its latest financials for the June quarter.

Why so keen for Marmota?

Marmota operates three SA-based projects:

  • The Gawler Craton Gold Project: A 6,000 square kilometer tenement near the Challenger Gold Mine which has produced in excess of 1m ounces of gold

  • The Melton Copper Project: Has been idle since April 2017

  • The Junction Dam Uranium Project: Has intersected high grades of uranium mineralisation and situated next door to Boss Energy's Honemoon Project

Uranium is arguably one of the more exciting prospects for Marmota, given the recent stepchange towards nuclear power adoption from countries including Japan, India, Germany and the UK.

Situated approximately 30km away the Junction Damn tenement is the near $1bn market cap Boss Energy (ASX: BOE). On 1 June 2022, Boss Energy approved a final investment decision to recommence production at its Honeymoon Project, with first production anticipated in the December quarter of 2023.

While Junction Dam is still in its early days, the project currently has a JORC Inferred Resource of 5.4m pounds of uranium with an overall exploration target of 22-33m pounds.

The Gawler Craton Project has also made an interesting turn following the discovery of rare earths along the outskirts of its tenements.

The company said that shallow drilling returned "regionally extensive" rare earth elements that "[extend] several kilometres."

The once copper and gold oriented explorer has now transitioned into a play on renewables and nearology. While its shares have mostly traded sideways for the last 12 months, the company has at least one big fan willing to extra.

MEU share price chart
Marmota 12-month price chart


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Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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