Resolute Mining (ASX:RSG) is raising up to $25 million via a convertible note offer for drilling programs and feasibility studies on its Bibiani gold project in Ghana and its Syama gold project in Mali.
The offer will comprise the issue of 15,000,000 convertible unsecured notes with a face value of $1 per note to raise up to $15 million before costs, with the ability to accept oversubscriptions of up to $10 million.
This provides flexibility for Resolute’s current project development opportunities and is also a prudent capital management initiative in light of prevailing market challenges in the gold sector.
The offer has been underwritten by major shareholder ICM Limited for $15 million.
Last month, RSG intersected broad, high grade gold mineralisation in deep drilling at Syama which has advanced the potential for an increase in underground reserves beneath the open pit.
An intercept of 88 metres at 2.73g/t gold highlighted the robust and consistent nature of the Syama orebody at depth.
An underground feasibility study is due to commence in early 2015 following completion of current drilling program and block modelling.
Resolute is an unhedged gold miner with two operating mines in Africa and Australia, and is one of the largest gold producers by volume listed on the ASX.
Resolute’s flagship Syama project in Mali is on track for an increase in production to 270,000 ounces of gold per year following an approved expansion to be undertaken through FY2016.
At its Ravenswood mine in Queensland Resolute is investigating a number of opportunities to add value by increasing gold production and lowering operating costs.
In Ghana, the company operates the advanced Bibiani gold project where work is being undertaken on an underground feasibility study including a 20,000 metre drill program.
Resolute has also identified a number of exploration targets at its Ravenswood operations and holds a number of exploration projects in Tanzania surrounding its now completed Golden Pride mine.
The company is capped at $166 million.
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