Croesus seeks almost $9m with rights issue

Kalgoorlie-based Croesus Mining NL has announced rights issue to raise almost $9 million to fund an accelerated mine development and exploration program at its Norseman gold operations in Western Australia.

Croesus has recently forecast a half year loss of $28 million, more than two thirds of which is due to a new accounting treatment of its hedge book.

Michael Kiernan took the chair of Croesus last week.

CROESUS ANNOUNCES $8.6M RIGHTS ISSUE
Croesus Mining NL (ASX: CRS) today announced a pro-rata renounceable rights issue to all shareholders to raise up to $8.6 million to fund an accelerated mine development and exploration program at its Norseman gold operations in Western Australia.
The funds raised will support Croesus' strategic focus on the continued growth in gold production at the Norseman operations.
Croesus has lodged a Prospectus with the Australian Securities and Investments Commission (ASIC) for a pro-rata renounceable rights issue on the basis of one (1) share for every ten (10) shares held at an issue price of 26 cents per share. A total of approximately 32.9 million new shares will be issued pursuant to the rights issue to raise a maximum of approximately $8.56 million. The new shares will rank equally with the existing shares on issue.
The funds will be utilised to extend mine development and associated infrastructure at the Harlequin and Bullen mines, the two key underground production centres currently at Norseman, as well as to fund an accelerated exploration program at the Mararoa Reef.
At Harlequin, which currently provides the bulk of high-grade ore feed at Norseman, funds will be used to extend the HV1 East and Redfin declines to increase production, while at Bullen, mine development will be undertaken at the St Patricks and Mararoa ore bodies.
The priorities of the exploration program include resource definition drilling targeting the Mararoa Reef, where Croesus has recently gained enhanced drill access as a result of mine development to the St Patricks ore body.
Last week, Croesus reported high-grade gold intersections from underground drilling targeting the Mararoa Reef including grades of 104g/t gold and 93.5g/t gold over narrow widths typical of Norseman. These results have upgraded the potential of the Mararoa Reef (one of the most prolific Norseman orebodies with 1.15Moz past production) as a future source of high-grade production.
Croesus Managing Director, Michael Fowler, said: "The rights issue will underpin Croesus' plans to continue to expand production from the Norseman operations through a focused mine development and exploration program targeting both existing and new production centres including the highly prospective Mararoa reef, where we now have the opportunity to comprehensively test the entire reef structure for the first time."