PERTH (miningweekly.com) – Dual listed gold miner Resolute Mining has launched a major capital raise to repay debt and fund work in Mali.
The equity raise includes an underwritten institutional placement of 258-million new shares, raising an initial A$41-million.
An underwritten 1-for-1.11 pro-rata accelerated, non-renounceable institutional entitlement offer of 348-million shares will raise a further A$56-million. The retail component of the entitlement offer will consist of up to 646-million shares, and could raise up to A$103-million, of which A$43-million is underwritten.
The equity raise will be priced at 16c a share, representing a 22% discount to Resolute’s last trading price and a 23.1% discount to the company’s five-day volume weighted average share price.
Proceeds from the A$140-million underwritten capital raise will be used to repay debt, reducing the company’s net debt position from $156-million to $65-million.
Proceeds from the non-underwritten retail entitlement offer component, which will be used to further reduce debt, provide general working capital, and to fund growth initiatives, including the potential expansion of the Syama North operation, in Mali.
The Syama North expansion plans include drilling and test work to convert resources to reserves and completion of the prefeasibility study in the first quarter of 2023 ahead of the commencement of a definitive feasibility study in the second quarter of 2023. Development of the Syama North resource is expected to provide ore feed for a low capital expenditure expansion of the sulphide circuit to achieve economies of scale and reduce all-in sustaining cost per ounce.
“Resolute’s performance has steadily improved with four consecutive quarters of increased production. This equity raising is the final step in Resolute’s transition to a sustainable gold producer with a derisked balance sheet,” said MD and CEO Terry Holohan.
“The company is now in a strong position to pursue a new openpit operation at Syama North, together with low capital expansion options for the sulphide circuit.”