Ausgold to raise $3.6m

Junior explorer Ausgold has received commitments to raise $2.4 million through a share placement and up to $1.2 million via a share purchase plan to fast-track exploration at the company’s Katanning gold project in Western Australia.

Ausgold said it would use the proceeds to complete drlling within the central zone of the Katanning project and to complete metallurgical test work.

The company will issue 198 million shares at 1.2 cents per share, with Taylor Collison acting as lead manager to the placement.

Ausgold shareholders can also subscribe for up to $15,000 worth of shares on the same terms as the placement.

Managing director Matthew Greentree said the company was now well positioned to accelerate its exploration programs.

"An extensive drill campaign will commence immediately targeting high-grade gold mineralisation within the central zone of the Katanning gold project," he said.

"This new drilling will build on the findings of the recent scoping study and will include extensions to the high-grade gold mineralisation identified in areas where this mineralisation remains open both along strike and down-dip.

“It is anticipated that drilling these extensions will further expand the current 1.2-million ounce-gold resource."

Mr Greentree said the planned exploration would also extend Ausgold's regional targets including the Burong and Nanicup Bridge prospects.

Shares in Ausgold were down 7.14 per cent to trade at 1.3 cents per share, as at 1:10pm AEDT.