• Sunshine Metals will raise $3m at 0.6c per share to advance shallow gold targets
• The company plans to drill four targets at the Ravenswood consolidated gold project
• Metallurgical studies also planned at Lionstown

Sunshine Metals is raising $3 million via a placement at 0.6 cents per share to accelerate drilling of four shallow gold targets and to progress mining studies at the Ravenswood consolidated project in Queensland.

The project hosts 6.99Mt at 4g/t gold equivalent for 904,000oz gold equivalent, along with the promising Liontown, Plateau, Tigertown and Plateau projects.

The company’s strategy of identifying shallow (<50m) gold oxide resources for processing at potential, nearby toll treating mills, is well timed with prices for the precious metal recently hitting the US$3000/oz mark.

There’s clear support among shareholders for this plan of attack, with Sunshine Metals (ASX:SHN) reporting strong demand for the placement among existing shareholders, institutional and sophisticated investors.

Hedley Widdup’s Lion Selection Group (ASX:LSX), one of the most prominent junior gold investors in the Aussie market, is also increasing its stake to emerge as a substantial shareholder with a 7% shareholding.

Watch: Ravenswood takes flight on a bolstered resource

Accelerating promising targets

Sunshine aims to rapidly evaluate the commercial potential of these assets.

At Liontown, drilling for metallurgical samples is planned next month with the goal to upgrade the current inferred 21,000oz gold at 1.8g/t gold resource to indicated, after which mining studies can commence.

At Plateau, which hosts an inferred resource of 49,000oz at 2g/t gold, resource classification drilling and metallurgical testing is planned in May.

“The funds raised will be applied on accelerating drilling, metallurgical test work and mining studies, on the shallow oxide gold Resources at Liontown and Plateau, and advanced targets at Tigertown and Coronation,” Sunshine managing director Dr Damien Keys said.

“We have pending results from our recent drilling at Tigertown, and upcoming drilling scheduled at Coronation, Liontown and Plateau, all making for a dynamic period ahead.”

Initial drilling programs are also planned at Tigertown and Coronation, to be followed by more drilling and preliminary metallurgical studies, positive results pending.