Mercator Gold plc (AIM: MCR) has raised £2.6 million (before expenses) by placing convertible loan notes with institutional investors.
The notes pay interest of 8.5% per annum and can be redeemed by 16th October 2010 or converted into to ordinary shares in the Company at escalating conversion rates: 95p per share in the first year of issue and 120p per share in the second year of their issue.
The funds will be used to speed up pre-stripping at the Bluebird deposit and to drill the company's new discovery - the Euro project.
The company also reported that the commissioning of the Bluebird Mill is advancing smoothly with production ramping up according to schedule. Mill throughput of up to 240t/hour has been achieved and metallurgical recoveries have exceeded the planned levels of 90%.
Patrick Harford, MD of Mercator Gold, said:
"Mercator is keen to proceed with the opening up of the Bluebird Pit and to drill the Euro Project. These projects will underpin the Company's objective of producing 120,000 ounces of gold over the next 12 months."