Kingwest Resources launches $3.3 million rights issue to accelerate Menzies gold exploration

Kingwest Resources Ltd (ASX:KWR) has launched a fully underwritten non-renounceable rights issue to raise $3.3 million to fund aggressive exploration programs at its Western Australian gold projects. Proceeds will be primarily used for accelerating exploration as well as development programs, mineral resource estimates and scoping studies at the Menzies Gold Project (MGP). Funds will also be allocated to a maiden drilling program at the Goongarrie Gold Project (GGP). Well-funded Following completion of the rights issue and divestment of the non-core Goongarrie Lady asset, Kingwest will have $6 million in cash to fast-track exploration at MGP. The intention is to grow and upgrade the existing 320,000-ounce gold JORC-compliant resource and continue pre-development work. Rights issue details Under the rights issue, Kingwest shareholders will be offered one new share for every five existing shares held on the record date of August 28, 2020, at a price of 13.5 cents per share. This offer price represents a 13% discount on the 5-day volume-weighted average price of 15.5 cents a share. Kingwest’s directors also intend to participate for their full entitlement. The offer is open to all eligible shareholders who have a registered address within Australia or New Zealand and hold shares on the record date and will close September 11, 2020. Canaccord Genuity Limited has fully underwritten the offer and is acting as lead manager. Aiming to unlock value Kingwest Resources is focused on gold exploration in the Eastern Goldfields of Western Australia. The company owns both the MGP and GGP, and it plans to unlock the value of both with an aggressive drilling program to take place in the next 12 months. The MGP is 130 kilometres north of the globally significant gold deposits of Kalgoorlie and covers a contiguous land package over a strike length in excess of 15 kilometres. At MGP, the company intends to continue exploration drilling to follow-up intersections such as 3 metres at 158 g/t gold from 180 metres and 3 metres at 75 g/t from 84 metres in the First Hit system, which is open at depth and along strike. GGP plans The GGP is about 40 kilometres south of MGP and 90 kilometres north of Kalgoorlie and sits on the strike extension of Bardoc Gold Ltd’s (ASX:BDC) 1.7-million-ounce Aphrodite gold deposit. Kingwest is planning first-pass drill testing of multiple major geological contacts that run through the GGP under shallow salt lakes.