Gorilla Gold Mines (ASX: GG8) is set to accelerate exploration activities at the promising Lakeview discovery at its Comet Vale project in Western Australia with new funding support.

The company has received firm commitments from leading domestic and international resource investors to raise up to $25 million.

The placement supports Gorilla’s strong balance sheet, including a pro forma cash position of approximately $39m.

Major shareholder support

The placement comprises the issue of up to approximately 65.8 million new fully paid ordinary shares in Gorilla at $0.38 per share, representing a discount of 5% to the last closing price prior to the placement of $0.40.

Existing substantial and strategic shareholder Genesis Minerals (ASX: GMD) has committed to subscribe for $1.84m worth of shares to maintain its pro rata holding in the company.

Gorilla Gold intends to use funds raised from the placement to help accelerate exploration drilling at the Lakeview discovery and to undertake further work at the company’s other gold projects in WA.

‘A clear endorsement’

“We are very pleased with the level of support shown by well-credentialled long-only resource investors for the placement,” chief executive officer Charles Hughes said.

“The strong demand received represent[s] a clear endorsement of Gorilla’s high-grade growth strategy and the recent Lakeview discovery at Comet Vale.”

“The funds raised will also ensure we can maintain our ongoing exploration momentum at the Comet Vale, Mulwarrie and Vivien projects.”

Promising drill results

Gorilla announced earlier this month that it had intercepted additional high-grade gold mineralisation at the Lakeview prospect, including a highlight of 20m at 6.1 grams per tonne gold from 153m.

The Comet Vale project has seen historical production of approximately 200,000 ounces at 20g/t gold, with underground operations occurring as recently as 2018.

The bulk of the previous production came from the Sovereign prospect, which hosts a mineral resource estimate of 96,000oz at 4.8g/t gold.

Ideal location

Sovereign lies adjacent to the Goldfields Highway, in a region with multiple operational gold mills within a 100-kilometre radius of the project area.

In addition to the Sovereign prospect, the company has identified gold mineralisation at the Cheer and Lakeview prospects, which are hosted on a major east–west shear zone.

With previous operators aiming to bring the Comet Vale mine into production as quickly as possible, Gorilla believes the project has significant growth upside.