Kingsgate to raise A$59m for debt repayment, Chile project
PERTH (miningweekly.com) – ASX-listed Kingsgate Consolidated has launched a capital raising of up to A$59.4-million to repay its debts and fund the predevelopment of its Nueva Esperanza project, in Chile.
The miner said on Tuesday that it would place up to 14.7-million shares, to raise an initial A$14.7-million, along with a 3-for-11 accelerated nonrenounceable entitlement offer to raise up to A$44.8-million.
The issue price offered under the placement and entitlement offer would be A$1 a share, which represented a 22.5% discount to the company’s last trading price and a 21.3% discount to the five-day volume-weighted average price of Kingsgate shares.
Resource Capital Fund (RCF) has committed to an A$11.1-million investment as part of the offer, delivering a minimum of A$39.2-million of committed and underwritten proceeds to Kingsgate.
If the RCF commitment is not required in full, Kingsgate would seek shareholder approval to permit RCF to be issued the difference between its commitment and the funds subscribed by them under the entitlement offer.
Besides paying back corporate debt and funding the predevelopment expenditure at Nueva Esperanza, the proceeds of the raising would also be used to complete the definitive feasibility study at the Bowdens silver project, in New South Wales, as well as its environmental-impact statement, and to fund working capital needs.
Kingsgate has placed a $140-million price tag on the development of the Nueva Esperanza silver/gold project, which is likely to produce about 7.5-million ounces a year of silver equivalent, based on the current reserve of 17.1-million tonnes, at 97 g/t silver and 0.27 g/t gold.
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