Krakatoa Resources (ASX: KTA) raises A$1.3m to drill Zopkhito antimony-gold project in Georgia

Why is Krakatoa Resources raising fresh capital and what is the target of its Zopkhito exploration campaign?

Krakatoa Resources Limited (ASX: KTA) has secured AUD 1.3 million in fresh capital through a placement of 124 million ordinary shares at AUD 0.0105 each, with the proceeds earmarked for a maiden drilling program at the company’s Zopkhito Antimony-Gold Project in Georgia. The placement, announced on June 18, 2025, includes an offer of unquoted options on a 1-for-2 basis, exercisable at AUD 0.02 and expiring on September 30, 2026. This funding marks a key milestone in Krakatoa Resources’ bid to transition Zopkhito’s Soviet-era foreign mineral resource estimate into a compliant JORC 2012 framework.

The Australian mineral exploration company intends to commence a 7,000 to 10,000 metre diamond drill program in July 2025, with site access and logistical preparations reportedly nearing completion. Executive Chairman Colin Locke stated that the capital raise received strong backing from both existing and new shareholders, highlighting what he described as growing institutional recognition of the project’s geological potential. According to the company, the Board of Directors plans to participate in the placement with a personal commitment of 3 million shares and 1.5 million attaching options, pending shareholder approval at a general meeting in late July 2025.

The placement will be completed under Krakatoa Resources’ existing issuing capacity—58,986,598 shares under ASX Listing Rule 7.1 and 62,013,402 shares under Rule 7.1A. The offer carries a 6% capital raising fee and is expected to close with allotments around June 25, 2025.

What geological targets and historic resource estimates is Krakatoa Resources aiming to validate at Zopkhito?

The Zopkhito Project is located in Georgia’s northern Racha region and covers approximately 1,779 hectares. The project lies around 170 kilometres from Kutaisi, Georgia’s second-largest city, and benefits from proximity to railway lines connecting it to the deep-water Black Sea ports of Poti and Batumi. This logistical positioning supports its potential development as a future export-oriented mining operation.

Krakatoa Resources is targeting a mineralised system previously classified under the Russian GKZ resource reporting framework. Based on earlier estimates, Zopkhito hosts an antimony resource of 225,000 tonnes at an average grade of 11.6% Sb for 26,000 tonnes of contained metal. It also contains a gold inventory estimated at 7.1 million tonnes grading 3.7 grams per tonne, equating to approximately 815,119 ounces of gold.

The forthcoming drill campaign will aim to intersect the high-grade antimony vein systems as well as gold-rich alteration zones found in the footwall and hanging wall structures. Additional in-adit drilling and geophysical surveys are also planned to test for lateral and depth extensions. The strategic goal is to convert the current foreign estimate into a JORC-compliant mineral resource, which would provide a stronger foundation for development and future financing efforts.

Why is antimony considered a critical mineral and what role does Georgia play in supply chain dynamics?

Antimony is listed as a critical mineral by multiple jurisdictions due to its wide-ranging industrial, defense, and energy transition applications. The metalloid is used in flame retardants, semiconductors, battery alloys, lead-acid battery production, solar panel manufacturing, and military-grade munitions. Global demand for antimony has been rising, while supply remains constrained and highly concentrated. China currently dominates the global antimony supply chain, with growing geopolitical risk prompting diversification strategies from Western economies.

Georgia offers strategic advantages as an emerging resource jurisdiction positioned at the crossroads of Europe and Asia. The country has developed a reputation for investor friendliness, backed by structural reforms and bilateral trade agreements. In 2023, Georgia recorded a GDP of USD 30.5 billion and per capita income of USD 8,210. The country posted 7.5% GDP growth that year, continuing a decade-long average of 5.2% annual growth.

Georgia ranks highly on World Bank metrics such as ease of doing business (No. 7 globally), starting a business (No. 2), and budget transparency (No. 1). It offers duty-free access to approximately 2.8 billion consumers via FTAs with the European Union, China, Turkey, EFTA, and GSP arrangements with the United States, Japan, and Canada. Ongoing negotiations with India and Israel further extend its trade integration potential.

For mineral explorers like Krakatoa Resources, Georgia’s logistical infrastructure, investor protections, and trade connectivity offer a compelling jurisdictional upside—though not without risk.

What are the key risks that Krakatoa Resources has flagged related to Zopkhito’s development timeline?

While the capital raise advances the Zopkhito exploration narrative, Krakatoa Resources has acknowledged several risks that may impact its execution timeline and asset monetisation strategy. The most immediate concern involves tenement security. The Georgian vendors are currently in the process of securing an extension for the expired exploration period. Krakatoa Resources noted that while it is unaware of any impediment to renewal, there is no guarantee of approval. If denied, the company would need to reevaluate its option agreement and long-term plans for Zopkhito.

Operational risks include metallurgical uncertainty, variability in geological formations, adverse weather, equipment delays, and unforeseen costs related to exploration in remote or rugged terrain. The company also noted it is not yet generating revenue and will require further capital beyond this placement to support ongoing exploration or potential development.

From a macroeconomic standpoint, Krakatoa Resources is exposed to commodity price volatility, especially for antimony and gold. Because global metals pricing is denominated in U.S. dollars, and most company expenses are in Australian dollars, the firm faces exchange rate fluctuations that could impact project economics.

Additional layers of complexity come from Georgia’s sovereign risk profile, which—while improving—still carries political, fiscal, and regulatory unpredictability. Institutional investors typically evaluate such risk-adjusted returns through the lens of comparable jurisdictions and project stage. While early signs have been encouraging, any delays in regulatory approvals or geopolitical disruptions could materially impact asset valuation and future fundraising.

How are institutional and retail investors responding to Krakatoa Resources’ current trajectory?

Investor sentiment toward Krakatoa Resources appears cautiously optimistic, anchored by the dual value proposition of gold and antimony in a high-grade system and a relatively underexplored jurisdiction. The firm’s ability to close the AUD 1.3 million placement during a volatile period for junior explorers suggests a base level of shareholder support, especially for critical mineral narratives with scalability.

Analysts and institutional investors remain attentive to the company’s execution against near-term milestones. Chief among these are the commencement of drilling in July 2025 and early-stage assay results by Q3 or Q4 2025. Successful confirmation of mineralisation continuity and grade consistency would significantly de-risk the asset, laying the groundwork for a maiden JORC resource estimate—an event that could attract a broader investor base and improve liquidity.

The participation of Krakatoa Resources’ Board in the placement is also being interpreted as a vote of internal confidence, though the relatively modest subscription volume (3 million shares) tempers this somewhat. Still, market observers note that the transition from historic Soviet resource classifications to modern JORC standards will be closely scrutinized, particularly in light of growing demand for transparent and auditable mineral inventories.

What comes next for Krakatoa Resources and how might the Zopkhito Project evolve over the next 12 months?

Over the next 12 months, Krakatoa Resources will prioritize executing its 7,000–10,000 metre drill campaign at Zopkhito, with the stated objective of intersecting both high-grade antimony veins and structurally controlled gold zones. Early results will be critical for determining the mineralised envelope and its potential economic footprint. Should drilling validate or expand the foreign resource estimate, the company may move forward with a JORC-compliant resource statement—opening the door to feasibility studies, offtake discussions, or even strategic partnerships.

Further geophysical surveys and in-adit drilling are expected to play a role in refining the geological model and targeting new zones of interest. Meanwhile, investor updates and sample results will likely serve as key catalysts for market revaluation.

Krakatoa Resources’ ability to secure long-term tenement rights and maintain consistent field activity will be central to its momentum. Success at Zopkhito could also create optionality for the exploration company in terms of joint ventures, project monetisation, or even a transition into early-stage development pending favourable economics.

While challenges remain, the AUD 1.3 million capital injection provides a meaningful bridge to the next set of value-inflection events, anchoring investor attention on a potentially transformative drilling season.