West Perth-based gold explorer Goldstar Resources NL has taken a further step towards advancing its Walhalla Gold project in Victoria's East Gippsland region with the completion of a fully subscribed $5.1 million share placement.
West Perth-based gold explorer Goldstar Resources NL has taken a further step towards advancing its Walhalla Gold project in Victoria's East Gippsland region with the completion of a fully subscribed $5.1 million share placement to accelerate its 2006 exploration and development activities.
The placement, comprising 12.75 million shares at 40 cents each, was made to the major international investment group Zurich Trust Ltd, through its nominee company, Z Nominees Ltd. Zurich Trust is a subsidiary of Zurich Financial Services, one of the world's largest institutional investors.
Following strong investor support, Goldstar said today it intended to seek shareholder approval to raise an additional $2.9 million through the placement of a further 7.25 million shares at 40 cents, amounting to a total capital raising of $8.0 million. Goldstar's major shareholder, Kingsgate Consolidated Ltd, has indicated its intention to subscribe for approximately $1.2 million of this second tranche to maintain its 19.72 per cent interest in the company, reflecting its continued support for Goldstar's exploration and development program at Walhalla.
The proceeds of the share placements, together with existing cash reserves, will increase Goldstar's cash position to in excess of $11 million, providing a strong platform for its aggressive exploration programs and growth objectives at Walhalla.
The funds raised through the placement will be applied to expedite ongoing exploration and work programs at Walhalla. This follows the company's recent success particularly at the Eureka Dyke Bulge, located within the Ross Creek Line of mineralisation approximately 2 kilometres to the east of the Walhalla town site and historic mining centre. In addition, funds will be used to progress the ongoing Scoping Study and sampling on the Lomond/Repeat Reefs.
Goldstar's managing director, Andrew King said he was delighted with the level of investor support for the company.
"This provides a strong platform to accelerate our work program at Walhalla on several fronts, building on our recent success," Mr King said.
"With the excellent results from Eureka and the Ross Creek Line, we have really begun to open up the broader potential of the Walhalla Project, clearly demonstrating our commitment to advance prospects rapidly to the drilling and Bulk Sampling stage.
"This aggressive approach has already paid dividends and will, we believe, continue to deliver strong growth for Goldstar as we move to systematically test the numerous other dyke bulge targets within the Ross Creek Line and elsewhere."
The placement shares will rank pari passu with the company's existing ordinary shares. Following allotment of the shares pursuant to the two placements, Goldstar will have a total of 105.4 million shares on issue.
