How Will Cavalier’s $2.14M Placement Accelerate Crawford Gold Drilling?

Placement to Accelerate Resource Development

Cavalier Resources Limited (ASX, CVR) has announced a placement to raise approximately $2.14 million before costs, issuing over 9.2 million new shares at $0.23 each. This price represents an 11.9% discount to the 15-day volume weighted average price (VWAP), reflecting a strategic move to quickly secure funding for advancing its flagship Crawford Gold Project in Western Australia.

The funds raised will be principally directed towards near-mine resource development and extensional drilling, aiming to expand the current JORC Mineral Resource and define potential staged expansions beyond the initial starter pit. CEO Daniel Tuffin emphasised the importance of accelerating drilling within the next 12 months to optimise future mining operations and enhance project value.

Ongoing Negotiations for Significant Pre-Payment

Alongside the placement, Cavalier continues to negotiate binding agreements for a proposed US$11 million secured upfront pre-payment with Raptor International Limited. While these discussions remain active, the company stresses that the placement is unrelated and unaffected by the pre-payment talks. The pre-payment deal, if concluded, would provide a substantial capital injection to support project development, though it remains subject to due diligence and approvals.

Strong Project Economics Confirmed

The announcement also revisits the updated Pre-Feasibility Study (PFS) for the Crawford Gold Project, released earlier in 2025. The PFS highlights robust financial metrics, including a net present value (NPV) of approximately A$51.7 million at an $4,600/oz gold price and an internal rate of return (IRR) of 580%. The study confirms a low-cost operation with all-in sustaining costs (AISC) in the lowest quartile at A$1,574 per ounce, underpinning the project's economic viability.

Key capital and operating cost assumptions remain stable, with total capital expenditure estimated at A$9.8 million and a mine life of 18 months for the initial stage. The project targets production of over 23,000 ounces of gold recovered, with a payback period of just 9 months, reinforcing its attractiveness to investors and financiers.

Placement Details and Market Impact

The placement shares will be issued under Cavalier’s existing placement capacities per ASX Listing Rules 7.1 and 7.1A, with Sanlam Private Wealth acting as lead manager. Sanlam will receive a 6% fee on funds raised and broker options exercisable at $0.50 with a two-year expiry, subject to shareholder approval at the upcoming AGM.

While the discount to market price may exert short-term pressure on the share price, the capital injection is expected to support near-term catalysts, including drilling results and potential resource upgrades. Investors will be watching closely how the company balances dilution with growth prospects.

Looking Ahead

Cavalier’s strategic capital raise and ongoing pre-payment negotiations position the company to advance its Crawford Gold Project towards production. The coming months will be critical as drilling results emerge and the pre-payment deal potentially crystallises, shaping the company’s development trajectory and market valuation.