Norseman Gold (LON:NGL, ASX:NGX) has confirmed that it is raising around £10 million in new capital via a private placing.
It released a short statement, in response to press speculation over the weekend, in which it confirmed that it is issuing new shares priced at 45 pence each - a 13 percent discount to Friday’s closing price - to raise £10 million.
Norseman said it will announce full details of the placing shortly.
By midday the shares were down nearly 5 pence, down 9.6 percent, to trade at 46.8 pence a share.
The Norseman mine in Western Australia is the country’s longest continuously running gold mining operation. In recent years the company has focused on new development project to find new resources and increase production, helping it give the ageing mine a new lease of life.
This progress has come at a price. NGL has made a significant and ongoing investment in these developments, in the last three months alone it has spent A$14.6 million on exploration, mine development and equipment.
A lot of progress has been made with the help of this investment and now NGL is ready to start reaping the rewards.
The large Norseman mining area encompasses a number of underground gold mines - Bullen, Harlequin and OK Decline. The North Royal open pit will be the fourth mining operation on the Norseman site.
At the OK Decline - the most recent addition to the underground operation - Norseman has now begun production from stoping and it is expected to increase during the March 2011 quarter. The company began mining from North Royal in December and the first parcel of low-grade ore was extracted in earlier this month.