Junior gold explorer Breaker Resources has agreed to a non-brokered $8 million placement to a private equity fund managed by New York-based Electrum Group, with the proceeds to fund drilling activities at Breaker’s Lake Roe mine in Western Australia.
The company will issue approximately 23 million shares at 35 cents per share to Electrum Strategic Opportunities Fund, with no intention to seek shareholder approval.
Upon completion of the placement, Electrum will become Breaker's largest shareholder and is expected to own around 10 per cent of the company.
Electrum will also have the right to nominate a person to Breaker’s board.
The placement follows a strategic review undertaken by Breaker, which the company said aimed to unlock the full value of its Lake Roe gold project, located about 100 kilometres east of Kalgoorlie.
Breaker said the proceeds of the placement would help grow the one million-ounce Bombora Resource at Lake Roe.
Reverse circulation and diamond drilling at the site is planned to start in the coming week.
Earlier this year, the company raised $6.3 million through a share placement to fund drilling at the site.
Shares in Breaker Resources were up 6.45 per cent to trade at 33 cents per share, as at 1:30pm AEDT.
