30/04/2019 - 15:43

Eastern Goldfields launches $40m rebirth

30/04/2019 - 15:43

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Failed gold miner Eastern Goldfields has released details of its planned recapitalisation strategy, with the company lodging a prospectus today for a capital raising of between $30 million and $40 million.

Eastern Goldfields launches $40m rebirth
Ora Banda flagged $15 million of improvements to the 1.2 million tonne per annum Davyhurst Mill.

Failed gold miner Eastern Goldfields has released details of its planned recapitalisation strategy, with the company lodging a prospectus today for a capital raising of between $30 million and $40 million.

The company, which plans to change its name to Ora Banda Mining, revealed details of a 1-for-1 rights issue priced at 1 cent per share to raise $7.6 million and close on May 15.

It is also seeking to raise up to $38.7 million via convertible notes, with the maximum amount to be reduced depending on whether there is a rights issue shortfall and the extent of the shortfall.

Additionally, Ora Banda will look to raise up to $4 million through a share placement, with the shares priced at 1 cent each, subject to shareholder approval at the company’s annual general meeting.

The annual general meeting is scheduled for June 7.

The company will issue up to 165 million options and 30 million shares to Hartleys, the lead manager appointed to manage the capital raising.

Investment company Investmet, associated with former managing director Michael Fotios, currently owns approximately 30.49 per cent of the company’s issued capital, and Hawke’s Point controls 12.06 per cent.

The company also owes $11.4 million to Hawkes Point, which along with most other creditors has accepted a partial debt repayment and a partial debt-for-equity swap.

If the capital raising is executed as planned, Hawke’s Point will own 42.85 per cent of Ora Banda, based on a capital raising of $30 million.

Ora Banda flagged $15 million of improvements to the 1.2 million tonne per annum Davyhurst Mill, which it identified as a key asset, and said it has defined a pathway to undertake a definitive feasibility study to realise the value of its gold deposits north west of Kalgoorlie.

It said historically, insufficient time and expense was devoted to the development of a robust mine plan and converting the resources to mining reserves.

In November, Eastern Goldfields went into administration a day after a $75 million recapitalisation deal fell through.

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