Caracal Gold PLC (LSE:GCAT) said it raised £2.0mln before expenses via a placing and that it will use the proceeds to fund the accelerated development at its Kilimapesa gold mining and processing operations in Kenya.
The East African focused gold producer placed 177mln new shares at 1.12 pence each, slightly above the company’s closing share price of 1.10 pence on Friday.
The shares were acquired by a major shareholder of the company and strategic clients of Clear Capital Markets, a UK-based stockbroker and wealth manager. Clear Capital Markets will be appointed as joint broker with immediate effect.
The proceeds will help the London-listed miner move ahead with the final phase of development at Kilimapesa that will see mine production double to 2,000 ounces a month.
READ: Caracal Gold excited as it moves to rapidly expand Kilimapesa gold operation
"This raising has attracted major shareholders at a premium, and long-term strategic shareholders to our company, and is further proof of the allure of Caracal's unique offering as an emerging gold producer in East Africa to the investor community,” said chief executive Robbie McCrae.
“It is an endorsement of our aggressive growth strategy in East Africa - at our flagship mine in Kenya, but also our strategic expansion into neighbouring Tanzania via our recent gold acquisitions - as we consolidate our position and move to become a significant gold producer in the region.
"The appetite for the gold is rising once more, as reflected in the recent resurgence in prices, which rose above US$1850/oz last week against the backdrop of rising inflation and lowering 10-year US Treasury yields. We look forward to maximising these market conditions as we build our gold production,” he said.
Caracal also announced the appointment of Clear Capital Markets as joint broker with immediate effect.
The company also said that, as a result of the funding, it will not be proceeding with the previously announced convertible announced on 7 December.