West Perth-based Monarch Gold Mining Company Ltd will raise $7 million through a placement to keep the company debt free and able to escalate exploration of its tenements.
The full text of a company announcement is pasted below
Monarch Gold Mining Company Limited (ASX:MON) is pleased to announce that it has agreed to a placement to sophisticated investors of 28 million shares at 25 cents raising A$7 million.
In addition, the Company plans to raise up to $19.5 million from a Non-Renounceable Share Entitlement pursuant to a prospectus to be lodged with the Australian Securities and Investments Commission today. Monarch will be offering up to 78,171,395 shares at an issue price of 25 cents per share to Eligible Shareholders on a basis of one new share for every four shares held at the Record Date. The entitlements issue is not underwritten.
Monarch Chairman Michael Kiernan said the placement and entitlements issue if fully subscribed would ensure Monarch remains debt free and cashed up to escalate exploration at Minjar and Bellevue as production commences at Davyhurst and Mt Ida.
"Mining will start at Davyhurst this month, Mt Ida site works are well underway and Monarch shareholders will see the first gold bar poured in late July.
"Reaching production from Davyhurst and Mt Ida, with an average head grade of a high 5.3 g/t, is a significant milestone. The Board is focused on increasing shareholder value through a well-funded exploration campaign at Minjar and Bellevue to increase resources and reserves," Mr Kiernan said.
Mr Kiernan added he believed the opportunities in front of Monarch are extraordinary and the benefits of being debt-free would enable Monarch to continue to evaluate a number of acquisitions as the company strives toward its goal to become a 500,000 ounce p.a. gold producer by December 2009. He also confirmed it is his intention to take up his entitlement.
