Red 5 Limited (ASX: RED) is raising up to $60 million to recommence operations at its Siana gold mine in the Philippines and repay its outstanding debt facility.
The company plans to raise up to $50 million through a private placement of 500 million shares priced at $0.10 each to domestic and international institutional as well as domestic sophisticated investors.
It will also raise a further $10 million through a share purchase plan to existing shareholders. This includes a provision for oversubscriptions up to a further $5 million.
Proceeds will be used to implement the planned interim tailings storage solutions at the Siana gold mine ahead of planned recommencement of mining operations and to repay the debt facility with the company’s senior lender.
The combined equity raising replaces the non-renounceable Entitlements Offer which closed on 30 August 2013 and raised $8.7 million. Application monies received under the Entitlements Offer will be refunded in full.
Milling at Siana ceased on 25 April 2013 following tailings dam wall compromise and the mine site was placed on care and maintenance during May/June.
The project, as originally designed, delivers a minimum 849,000 ounces of gold production at a cash cost of sub US$400 per ounce over a ten year life
The Siana orebody remains open to the north and south, and below 400 metres vertical. The first gold was poured in February 2012.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.