www.tanami.com.au
Tanami Gold NL is an Australia-based company engaged in gold mining and mineral exploration. Tanami Gold NL's gold operations are located approximately 30 kilometres west of the Western Australia-Northern Territory border. The Coyote mine once seen as a "narrow vein gold deposit" is proving to be anything but that with mining revealing mineralised zones up to 5 metres wide and in deeper diamond drill holes, widths to 10 metres. Grades over these widths have averaged around 7-12 grams per tonne Au. The Company is currently in the early stages of developing the main Gonzales lode underground and the P2 ore-body in the open pit is planning to initially target 50-70,000 ounces per annum.
Tanami Gold completes $63.7m capital raising
Tanami Gold (ASX: TAM) has successfully completed its $63.7 million pro-rata renounceable entitlements issue at 1.5 cents to existing shareholders with a 92% take-up (3,890,383,063 shares), resulting in a shortfall of 355,685,008 shares.
Importantly, following completion of the entitlements issue, Tanami will also undertake a 1-for-30 capital consolidation, which will leave the company with approximately 260 million shares on issue.
This will result in the company’s capital structure being more attractive to major international institutional and other investors and is aimed at positioning the company for long-term growth.
The proceeds from the issue will be used to strengthen the company’s balance sheet by retiring debt and will provide additional working capital to accelerate exploration at the recently acquired Central Tanami Gold Project.
All shareholders who made application for shortfall shares will participate in the shortfall.
After taking into account applications for shortfall shares, the entitlements issue was heavily oversubscribed with total applications received for 4,919,919,662 shares compared to available shares of 4,246,068,071. Allotment of the new shares is expected to be completed by 19 August 2010.
Graeme Sloan, managing director, said “this is an outstanding result which vindicates our decision to raise capital through an entitlements issue which has provided all shareholders with the opportunity to participate in the raising."
“The completion of this raising puts Tanami in a very strong position as it strengthens the company’s balance sheet and will enable us to press full steam ahead with our growth strategy which includes major exploration programs across both our sites and finalising the Feasibility Study on the re-commencement of gold production at the Central Tanami Gold Project.”
A general meeting of shareholders will be held on 20 August 2010 to seek approval for the share consolidation.
At the completion of the entitlements issue and share consolidation, the company will have no debt, no hedging, issued capital of approximately 260 million shares and will be well positioned to emerge as Australia’s next mid tier gold producer.
