PERTH (miningweekly.com) – ASX-listed Tesoro Gold will raise A$8-million through a strategic placement to gold miner Gold Fields and a fully underwritten non-renounceable entitlement offer.
Tesoro on Thursday announced a A$4.2-million investment by gold miner Gold Fields through its wholly owned subsidiary Corporate International Holdings.
Gold Fields will subscribe for 120-million shares in Tesoro, priced at 3.5c each, with the gold miner also receiving one free attaching option for every two placement shares, exercisable at 7c each within three years of issue. The issue of the options is subject to Tesoro shareholder approval.
Tesoro and Gold Fields have agreed that 80% of the funds raised under the placement will be used on assessing regional targets at the El Zorro gold project, and for as long as Gold Fields holds a more than 5% interest in Tesoro, it will have a 50% representation on an advisory technical committee that will be formed over the El Zorro project.
While Gold Fields holds a greater than 5% interest in Tesoro, the company will also maintain the right to nominate a director to the Tesoro board, maintain the right to match any proposed third-party participation on the company’s mineral assets, and will maintain a participation right in future equity raises.
“We are very pleased to have attracted Gold Fields as a strategic investor in Tesoro and the El Zorro gold project. We believe this investment represents tremendous confidence in El Zorro and our team and recognition of the significant potential of the project. The investment by Gold Fields will, in particular, allow us to accelerate our district and regional exploration efforts, as well as continue to grow the mineral resource base at the Ternera gold deposit,” said Tesoro MD Zeff Reeves.
In addition to the share placement to Gold Fields, Tesoro will also undertake a fully underwritten non-renounceable entitlement offer to raise a further A$3.8-million.
Eligible shareholders will be able to subscribe for new shares in the company, also at an issue price of 3.5c each, and will receive one free attaching option for every two shares in issue. The entitlement offer will open on November 25 and close on December 6.