JOHANNESBURG (miningweekly.com) – Private equity group Greenstone Resources has agreed to invest $15-million to acquire a 29.82% interest in Brazil-focused gold exploration and production company Serabi Gold.
The strategic investment will take place via a subscription for 297 759 419 new ordinary shares at a price of 3.6p each, representing a 0.55% discount to the closing mid-price of 3.62p a share on Thursday.
The subscription provides Serabi with a strong platform to deliver the company's ambition to become a 100 000 oz/y gold producer within two years
The funds from the subscription will be used to undertake drilling to delineate additional resources and to expand the life-of-mine at the Palito and Sao Chico projects, as well as to satisfy the second instalment of the deferred consideration due for the acquisition and advancement of the Coringa project.
The funds will also be used for working capital and other corporate purposes.
Meanwhile, Greenstone Capital partner Mark Sawyer will join the board of Aim- and TSX-listed Serabi with immediate effect.
"We are delighted to welcome Greenstone as a long-term strategic investor in the company and look forward to working closely with them to unlock the full potential of Serabi's gold projects and pursue other growth opportunities,” said Serabi CEO Michael Hodgson.
He added that the new funds generated by Greenstone’s subscription would significantly strengthen Serabi's financial position as the company looked to expand and develop its Palito, Sao Chico and Coringa projects, as well as provide a platform to pursue further regional opportunities.