PERTH (miningweekly.com) – Gold miner Orinoco Gold has raised A$12.1-million in a share placement to ramp up production at its Cascavel operation, in Brazil, and to unlock value from its exploration assets.

Orinoco will place more than 115.8-million fully paid ordinary shares, along with one free attaching option on a one-for-three basis, exercisable at 11c each.

Part of the placement was taken up by Cascavel’s 30% joint venture (JV) partners, in lieu of payments due in September this year. The shares issued to the JV partners will be held in escrow until that time.

Under the placement, A$8.5-million of the funds would be classified as new monies, with the remaining A$3.6-million raised in lieu of the $2.85-million payment due to the Cascavel JV partners. The new shares will be priced at 12c a piece and at a volume weighted average price of 6c each for the company’s JV partners’ $1.35-million to be paid in shares.

“With a strengthened balance sheet and lower cost base, Orinoco now has established a very robust platform to aggressively pursue our planned gold production ramp-up and exploration programme over the coming months,” said Orinoco chairperson Joseph Pinto.

Pinto also said he was pleased that the company’s Brazilian JV partners have increased their combined ownership in the company from 4% to 8% as part of this capital raise.

“We value strong in-country local partners and look forward to a closer working relationship going forward. We are thrilled by the ongoing support of existing and new shareholders in this share placement and hope to return their faith with results from our ‘back to basics’ approach.”

Some A$5-million of the capital raise will go towards the Cascavel project, where Orinoco was targeting a monthly production of 5 000 oz by the end of the year. A further A$3-million will be spent on a drilling programme that will start in the second quarter of this year, which is in addition to the current programme already being undertaken at the Antena deposit and to the pit sampling at Eliseo.