WPG Resources Ltd. dropped its plans to try and raise an additional A$5.4 million via a 1-for-8 nonrenounceable entitlement offer.

The ASX-listed company said Aug. 15 that it believes its capital raising would no longer be attractive to shareholders due to the current market conditions.

The cash raised was to be used for the expansion of the mill and development of the mine at the Challenger gold project in South Australia, as well as exploration.

In early July, WPG awarded a new contract to Byrnecut Australia Pty. Ltd. for all underground mining at the Challenger mine operation.

Just prior to the release of its entitlement offer in June, WPG raised A$7.2 million via a heavily oversubscribed share placement, which has also been allocated to the development of the Challenger project.

In the past year, the company's share price has slumped more than 68% to 3.8 cents. Shares were down 2.56% following the news it had withdrawn the entitlement offer.