REG - East Star Resources - Conditional Subscription & Placing

East Star ResourcesAnnouncement

04/10/2024 07:00

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RNS Number : 9074G  East Star Resources PLC  04 October 2024

4 October 2024

East Star Resources Plc

("East Star" or the "Company")

Conditional Subscription & Placing to Raise Approximately £1.16M

 

Delivers funding to advance Verkhuba Copper Deposit and drill-test high-impact
follow-on targets

 

East Star Resources Plc (LSE:EST), which is exploring for copper in
Kazakhstan, announces it has raised gross proceeds of approximately £1.16
million from an oversubscribed subscription for, and placing of, 100,926,292
new ordinary shares of £0.01 each ("Ordinary Shares") in the capital of the
Company (the "Fundraising") at a price of 1.15 pence per share (the "Issue
Price").

 

Key points

 

·    Strong backing from existing major shareholder and Directors

·    New resources-focused institutional cornerstone investor

·    Company funded to advance Verkhuba Copper Deposit and drill-test
high-impact follow-on targets on the Rudny Altai volcanogenic massive sulphide
("VMS") Belt licences and progress Tier 1 copper deposit targeting strategies

 

A discussion and Q&A on the Fundraising, forward work programme and recent
Half Year Report will be held via the Investor Meet Company platform on 7
October 2024 at 5 p.m. BST ("Webcast"). Further details appear below.

 

Use of proceeds

 

Following the Company's discovery of the Verkhuba Copper Deposit in 2023
(20.3Mt @ 1.16% copper, 1.54% zinc, 0.27% lead), East Star's management
believes the Company can add significantly to the value of this deposit by
increasing confidence in, and potentially growing, the resource, and advancing
metallurgical and engineering studies to determine the potential economics of
a mining operation.

 

At over 20Mt, Verkhuba is already in the top third of this style of VMS
deposit globally and with copper near $10,000 per tonne, and the prospect of a
low capex development in an infrastructure-rich region, management believes
considerable further value from Verkhuba can be unlocked through a work
programme which will be funded through this Fundraising.

 

In addition to Verkhuba, East Star has developed a number of high-impact
follow-on targets on its Rudny Altai VMS belt licences where copper
occurrences have been mapped in several locations in close proximity to the
historical Nikolaevsky deposit (40Mt @ 2.4% copper, 3.2% zinc, 1.1 g/t gold)
which is an area well-served by existing infrastructure.

 

Proceeds from the Fundraising will be used to advance the development concept
at Verkhuba through to a stage where economic feasibility can be demonstrated.
At the same time, the Company intends to advance and drill-test several
high-impact targets in the Rudny Altai VMS Belt and progress its targeting
strategy for Tier 1 copper porphyry and sediment-hosted copper deposits.

 

Further information on the Fundraising

 

The Company has received direct subscriptions from several investors for
86,578,480 new Ordinary Shares ("Subscription Shares") and will conduct a
placing of 14,347,812 new Ordinary Shares ("Placing Shares"). Subject to
receipt of subscription funds, the Company is proposing to issue and allot a
total of 100,926,292 new Ordinary Shares as part of the subscription and the
placing (together the "Fundraising Shares").

 

The Fundraising includes participation by way of a direct subscription by
certain Directors of the Company. The Fundraising was also supported by the
Company's largest external shareholder, which has agreed to invest £160,000
at the Issue Price. Additionally, the Fundraising includes participation by a
natural resources focused institutional investor, which has agreed to invest
£300,000 at the Issue Price.

 

The Fundraising remains subject to and conditional upon the Company having
published a prospectus (the "Prospectus"), which remains subject to FCA
approval, and the Fundraising Shares being admitted to trading by no later
than the longstop date of 15 November 2024 ("Admission"). A further
announcement confirming the publication of the Prospectus and the expected
date of Admission will be made in due course.

 

Alex Walker, CEO of East Star, commented:

 

"The opportunity in front of us is clear. Copper is the metal the world
urgently needs to discover more of and there are very few projects with copper
grades greater than 1%, close to surface, and with existing infrastructure. We
intend to drill Verkhuba to further improve our geological understanding of
what is already a significant copper deposit, as precursor to undertaking
economic studies. In doing so we aim to capture exponentially greater value
from this asset for shareholders than we could have achieved without this
work. We also intend to drill several high-impact targets that have been
worked up following several years of desktop work, geological mapping,
sampling and geophysics. Success in any one of these would add more valuable
base metal assets close to processing infrastructure.

 

I would like to thank our long-standing and new investors for supporting the
Company. As an exploration company, our job is to find mineral deposits where
the value of the resources far exceeds the capital required to discover and
develop them. With Verkhuba having more than 230,000 tonnes of contained
copper, and with copper at close to $10,000 per tonne, East Star has so far
delivered this in spades. We recognise the markets have been tough for junior
resource explorers, but we have not lost sight of the prize in Kazakhstan to
discover and develop highly sought-after new sources of copper in several
geological settings."

 

Investor discussion and Q&A

 

Alex Walker, CEO, will host the Webcast via the Investor Meet Company platform
on 7 October 2024 at 5 p.m. BST. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9 a.m. BST the day before the Webcast
or at any time during the live Webcast.

 

Investors can sign up to Investor Meet Company for free and add East Star
Resources Plc in order to attend the Webcast via:
https://www.investormeetcompany.com/east-star-resources-plc/register-investor
(https://www.investormeetcompany.com/east-star-resources-plc/register-investor)
.

 

No material new financial or other information will be provided. A recording
of the Webcast will be made available on the Company's website the following
day.

 

East Star Resources Plc

Alex Walker, Chief Executive Officer

Tel: +44 (0)20 7390 0234 (via Vigo Consulting)

 

SI Capital (Corporate Broker)

Nick Emerson

Tel: +44 (0)1483 413 500

 

Peterhouse Capital Limited (Corporate Broker)

Peter Greensmith

Tel: +44 (0) 20 7469 0930

 

Vigo Consulting (Investor Relations)

Ben Simons / Peter Jacob

Tel: +44 (0)20 7390 0234

 

About East Star Resources Plc

 

East Star Resources is focused on the discovery and development of copper and
other strategic minerals required for the energy revolution. With eight
licences covering >1,000 km² in three mineral rich districts
of Kazakhstan, East Star is undertaking an intensive exploration programme,
applying modern geophysics to discover minerals in levels that were not
previously explored. East Star's most advanced project is a copper deposit on
the world-class Rudny Altai VMS Belt where the Company delivered a JORC
compliant inferred resource of 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27%
lead close to infrastructure, within trucking distance of third-party mills
with excess capacity. East Star's management are based permanently on the
ground, supported by local expertise, and a joint venture with the state
mining company on certain projects. In 2024, East Star was selected to receive
grant funding through the BHP Xplor programme for copper porphyry exploration.

 

Visit our website:

www.eaststarplc.com (http://www.eaststarplc.com)

 

Follow us on social media:

LinkedIn: https://www.linkedin.com/company/east-star-resources/
(https://www.linkedin.com/company/east-star-resources/)

 

X (formerly Twitter): https://twitter.com/EastStar_PLC
(https://twitter.com/EastStar_PLC)

 

Subscribe to our email alert service to be notified whenever East Star
releases news:

www.eaststarplc.com/newsalerts (http://www.eaststarplc.com/newsalerts)

 

The person who arranged for the release of this announcement was Alex Walker,
CEO of the Company.

 

This announcement contains inside information for the purposes of Article 7 of
Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market
Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the
publication of this announcement, this inside information (as defined in UK
MAR) is now considered to be in the public domain.

 

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