Perth-based gold explorer CGA Mining Ltd will issue shares worth around $67.4 million through a placement of shares and units to fund the construction of its Masbate gold mine in the Philippines, the company has announced.
Perth-based gold explorer CGA Mining Ltd will issue shares worth around $67.4 million through a placement of shares and units to fund the construction of its Masbate gold mine in the Philippines, the company has announced.
The full text of a company announcement is pasted below
CGA Mining Limited (TSX: CGA; ASX: CGX) ("CGA", "the Company") is pleased to announce that it has engaged Haywood Securities Inc ("Haywood") to act as agent for a US$60 million private placement offering of common shares and units ("the Offering"). The proceeds, in combination with a US$65 million senior debt facility being arranged by BNP Paribas (as announced September 10, 2007), are proposed to be utilised to fund the construction of the Company's Masbate Gold Mine in the Philippines.
Haywood will also have an over-allotment option entitling them to sell additional common shares for further gross proceeds of US$5 million, exercisable two days prior to the closing of the Offering.
The common shares will be issued at a price of C$0.83 per share. Each unit will consist of one promissory note with a par value of US$1,000 ("Notes") and 250 transferable share purchase warrants. The Notes will pay a 12% coupon per annum, paid semi-annually until the earlier of the maturity date (five years) or redemption by the Company and will include terms standard for debt securities of this nature. The Notes shall be redeemable at anytime after the 24 month anniversary of the issue date. Each transferable share purchase warrant will be exercisable into one CGA common share for a period of thirty-six months from the date of closing and have an exercise price of C$1.03 per share.
The Company will have the right to accelerate the expiry date of the warrants if, following twenty four months after the issue date, the volume weighted average share price of CGA's ordinary shares equals or exceeds 160% of the exercise price for 20 consecutive trading days. CGA may accelerate the expiry date of the warrants to a 30-day period following delivery of a notice of acceleration.
The private placement is subject to regulatory approval. The Offering is expected to close on or about October 30, 2007, subject to shareholder approval for the issuance of the common shares and warrants, as required.
Masbate Gold Mine
The Masbate Gold Mine is an advanced stage gold development opportunity with NI 43-101 compliant indicated resources of 3.0m ounces, low grade indicated resources of 0.4m ounces and inferred resources of 1.8m ounces. CGA has agreed all key terms for a fixed price construction contract with Leighton Contractors Philippines Inc, a wholly owned subsidiary of Leighton Holdings Limited ("Leighton). Leighton is Australia's largest project development and construction group, with current work in progress of over A$6.8 billion in the mining and resource sector. The construction period is anticipated to last 15 months.
All key permits for construction of the Masbate Gold Mine are now in place including the Mineral Production Sharing Agreement (MPSA - initial term of 25 years and extendable) and the Mineral Processing Permit.
About CGA
CGA is a development company focused on the construction the Masbate Gold Project in the Philippines, with commercial production forecast for the first quarter 2009. The Company also has the 51% owned Mkushi advanced stage copper development project in Zambia (in the prefeasibility stage) and the 51% owned Segilola gold exploration project in Nigeria, considered to be the most advanced gold exploration project in the country.
