Gold miner Troy Resources were knocked over in the rush by heavyweight institutional investors clambering to get a peice of Troy's $40m capital raise this week. After turning out some stellar near mine drilling results in recent times, Troy have decided to target the low hanging fruit with a $16m exploration and development drive that will focus mostly on near mine exploration.
Troy Resources’ ambitious $40.7m capital raise looks to be well supported with heavyweight institutional investors lining up to get a piece of the action.
A raft of stellar drill results from near mine exploration programs at the company’s Karouni gold mine in South America have prompted Troy to pick off the low hanging fruit with a sizeable $16m exploration and development program within the vicinity of the existing mine.
Part of the $16m budgeted will be spent on finalizing a feasibility at the “Smarts” underground prospect within the Karouni Gold project.
Recent drilling at the Smarts 2 pit produced some pretty spectacular results that include 1m @ 132 g/t gold, 7m @ 18 g/t gold, 2m @ 53 g/t and 9m @6.55 g/t gold.
The company will raise a total of $40.7m with $10m set aside to strengthen Troy’s balance sheet and another $15m allocated for general working capital and corporate purposes.
The institutional component of the capital raising has already been completed and was heavily oversubscribed. The two-day book build closed yesterday and was overrun by demand, raising $27.9 million or 50% more than the original target of $18.4 million.
The new shares were offered at 36 cents each representing an 18.2% discount to the last closing price of 44 cents ahead of a trading halt on Tuesday.
The second leg of the capital raising is a 1-for-5.5 entitlement offer to retail shareholders, which opens next Tuesday. With the same very attractive discount price of 36 cents on offer, Troy should have no trouble reaching its overall target of $40.8 million.
Troy’s Managing Director, Martin Purvis, today said “We sincerely appreciate the strong support from our existing institutional shareholders and we are also pleased to welcome a number of new shareholders to our register. Successful completion of the institutional offer provides Troy with a strong a solid financial platform that will underpin the next phase of growth for our company.”
The aggressive exploration program is due to begin within weeks to capitalise on the start of the dry season. Whilst it will focus on near mine exploration Troy will also include a number of regional targets.
The district is one of the most prolific sources of artisanal gold in South America, but is largely untouched by modern exploration.
Near-mine exploration has already boosted Karouni’s reserves to more than 1.1 million ounces, but the company sees much greater potential.
One of the high priority targets is a possible underground operation beneath the Smarts open pit, where mining has uncovered a series of steeply dipping, high-grade gold veins.
Troy has a large portfolio of ready-to-drill targets in a highly prospective greenstone belt and will mobilize additional RC and diamond drill rigs very soon.
If it can repeat the results achieved since drilling began in mid-2013, Troy could soon be on its way to discovering its second million ounces of gold.