Turaco Gold raises A$35m to accelerate Afema project development

Turaco Gold Limited, trading on the ASX under the ticker TCG, has successfully raised AUD $35 million through an equity placement at 31 cents per share. This capital injection, aimed at accelerating growth at its Afema Project in Côte d’Ivoire, has drawn substantial interest, with the placement significantly oversubscribed by both existing and new institutional investors from Australia and overseas.

The oversubscription underscores investor confidence in Turaco’s strategy. The funds raised will be channeled into expanding exploration and drilling activities at the Afema Project, with the company planning to grow its maiden JORC Mineral Resource Estimate (MRE) of 2.5 million ounces. Turaco is targeting an updated MRE by Q1 2025. Additionally, the funds will support infrastructure development, community initiatives, and ongoing metallurgical testing—efforts that align with Turaco’s long-term objective to expand its presence in West Africa’s mining sector.

Managing Director Justin Tremain noted that the new capital provides a robust platform for increasing drilling efforts, including testing large-scale targets within the Afema Project area. He highlighted that with the onset of the dry season, drilling activities will accelerate, with two rigs already operational and more expected as capital deployment progresses.

A Strategic Expansion for Turaco Gold

Located in southeastern Côte d’Ivoire, near the Ghanaian border, the Afema Project benefits from key infrastructure developments, such as a nearly completed highway connecting Abidjan to Ghana and two major hydro-power plants near its boundaries. These infrastructural advantages position Turaco to scale its mining operations efficiently.

The company stated that the first tranche of shares is set for settlement on 24 October 2024, with allotment the following day. A second tranche awaits shareholder approval, with a meeting scheduled for late November. Settlement of this tranche is expected by early December. Turaco has partnered with Argonaut Securities Pty Ltd and Canaccord Genuity (Australia) Limited as Joint Lead Managers and Joint Bookrunners, with Euroz Hartleys Limited acting as Co-Manager, reflecting a well-coordinated approach to the equity raise.

Industry Insights on the Capital Raising

Industry analysts view Turaco’s ability to secure such substantial capital as a strong indicator of market confidence in its development strategy and the Afema Project’s potential. Experts highlighted that the oversubscription points to increasing interest in West African gold investments, particularly in stable jurisdictions like Côte d’Ivoire.

The placement was priced at a 13.9% discount to Turaco’s last traded price and a 3.7% discount to the 15-day volume-weighted average, offering an attractive opportunity for institutional investors. These terms demonstrate Turaco’s commitment to enhancing shareholder value while obtaining necessary capital for expansion.

Financial Outlook and Future Plans

Turaco’s proforma cash position post-placement is projected to be over AUD $48 million, allowing the company to meet its operational and development targets effectively. The funds will be strategically allocated to various aspects, including expanding the mineral resource base, advancing infrastructure, and supporting local community initiatives, ensuring a balanced and sustainable approach to growth.

The company plans to ramp up drilling activities with regular updates on its progress, aiming to significantly expand the Afema Project’s gold resource base beyond its current estimates. With solid backing from investors, Turaco is well-positioned to advance into the next development phase.