Alchemy Resources raises A$5 million through share placement

Alchemy Resources (ASX: ALY) has raised $5 million (before costs) through a share placement as part of its plan to accelerate the aggressive drilling campaign underway at the company’s copper-gold and gold projects in the Gascoyne Region of Western Australia.

The raising, which was completed by Bell Potter Securities at 65 cents a share and was heavily over-subscribed, will give Alchemy total cash reserves of approximately $8 million to drill an array of highly promising targets at its Magnus Copper-Gold Project, which borders Sandfire Resource’s tenements, and to grow the existing JORC resource at its Hermes gold project nearby.

Alchemy Managing Director Michael Hannington said the company’s strong cash position would enable it to accelerate the drilling programs at both Magnus and Hermes.

“It is now full-steam ahead at Magnus in search of a repeat of Sandfire’s DeGrussa copper-gold discovery,” Mr Hannington said.

“The geological characteristics which host DeGrussa continue right across the border into Alchemy’s ground and when combined with the results of our VTEM survey, give us good reason to be confident about our chances of success.”

“With drilling taking place at both Magnus and Hermes, Alchemy expects to generate a steady flow of news over coming weeks and months,” he added.

Alchemy also expects to raise a further $5.4 million through the conversion of listed options, which have a strike price of 25 cents and expire on 31 August 2010.

The company will test 15 priority one conductors identified in a VTEM survey at Magnus. One hole will be drilled in each conductor, with a down-hole electromagnetic survey conducted immediately at each target if the drilling does not make contact with the conductor.

Alchemy is also awaiting assay results from the first round of drilling in the latest program at Hermes. This drilling targeted three areas of known mineralisation as part of the program’s overall aim of increasing the existing 131,000-ounce JORC code compliant indicated resource at Hermes.

http://www.proactiveinvestors.com.au/companies/news/5921/alchemy-resources-raises-a5-million-through-share-placement-5921.html