Africa-focused gold mine developer Hummingbird Resources (LON:HUM) has raised £45.8mln (around US$67 million) via a placing and subscription to build its Yanfolila mine in Mali.
The firm issued 103mln shares at 22p a piece in a placing and executed a subscription offer for another 105mln at the same price, representing a discount of around 13% to the closing price of 25.25 pence per share on June 1.
Funds will be used to complete detailed engineering, order long lead items and to start construction at the site, 200km south of the Malian capital Bamak.
Managing Director Dan Betts said of the milestone moment: "We are now in a position to commence full-scale construction in order to bring Yanfolila, one of the highest margin undeveloped gold projects in Africa, to production.
"This equity placement enables Hummingbird to move immediately into detailed engineering with a clear timeline to production. The company will now have a strong balance sheet and is positioned to negotiate the best possible debt terms for our shareholders.
"The company will now make a number of key hires to strengthen the team. We look forward to making further announcements as we start delivering significant milestones at Yanfolila. Yanfolila will produce over US$70m of free cash flow in its first full year of steady state production."
A definitive feasibility study and mine plan has shown the mine to offer 132,000oz gold in its first full year's production with a life of mine average production of 107,000oz per year.
The Internal rate of return (IRR) is 60% and it had a NPV (net present value) of US$162mln using a US$1,250 gold price.
Broker Beaufort said: "Financing will be completed with a debt facility, but finding the equity component was the greater challenge and we understand Hummingbird is in advanced discussions with several debt providers.
"This is the most important milestone for Hummingbird since it acquired Yanfolila in 2014 and we look forward to regular updates as the mine progress towards production."
It rates shares a 'speculative buy' and puts its target price under review.
"We believe Hummingbird offers low-cost, near-term gold production and expect a re-rating of the stock now that the majority of the project financing has been secured."
The broker added: "Whilst execution risks remain, we note that the project is robust even at gold prices below current levels."