South Perth-based gold explorer Mutiny Gold Ltd will raise $3 million through a placement with Hong Kong based Jinshu Investment Group in the first part of a $6 million capital raising, the company announced today.
South Perth-based gold explorer Mutiny Gold Ltd will raise $3 million through a placement with Hong Kong based Jinshu Investment Group in the first part of a $6 million capital raising, the company announced today.
The full text of a company announcement is pasted below
Australian exploration and development company Mutiny Gold Ltd has signed a binding Memorandum of Understanding with Hong Kong based Jinshu Investment Group for the raising of a minimum of A$3m to its sophisticated investor clients.
The placement will be at 20c per share with one free attaching option for every four shares, at a strike price of 20c on or before 30 of September 2008. This represents a premium of 20% to the current MYG share price.
This A$3m placement is part of an A$6m capital raising soon to be undertaken by the company. Further details of this capital raising will be provided to the market in due course, but it is expected to be via an offer to existing shareholders and sophisticated investors on the same terms as the placement with the Jinshu Investment Group. The fundraising is subject to shareholder approval.
The signing of this agreement follows a road-show by the company to Hong Kong and China and a visit to the Mutiny's mine site by geological representatives of the Jinshu Investment Group.
The Jinshu Investment Group represents a large number of sophisticated investors in the Asian market, all of whom maintain stable investment positions across a variety of commodities and geographical settings.
The company believes the introduction of this group on to the Mutiny share register will provide a significant boost to the company moving forward.
"These sophisticated investor clients of Jinshu Investment Group have shown a propensity to back projects in their infancy and then continue to support them as they move from the development into the mining stages," Mutiny's Managing Director John Greeve said.
We see their involvement so soon after listing as a significant positive, particularly as we look to maintain the momentum we have generated since listing."
The board of Mutiny had planned to carry out a bulk sample at the Cassilis Gold project in Second Quarter 2007. However, due to the significant funding commitment made to the company and the potential for further funding, the board of Mutiny has decided to defer its
proposed bulk sample at the Cassilis Gold Project and instead opt for an extensive drilling campaign at the project so as to ensure a suitable platform for a JORC compliant resource estimate.
"We were aware that on or about this time we were going to require funds to maintain the exploration momentum at Cassilis," Mr Greeve said.
"We are on plan and focussed on the identification of a JORC resource at the project. We previously anticipated that a bulk sample would be necessary to provide adequate funding for our exploration program to maintain its current pace but this is now not the case as demonstrated by the support provided by the Jinshu Investment Group."
Mutiny has completed the establishment of services and 1km of rail in the Shamrock adit that provides access to 70m of exposed Cassilis gold bearing vein. The results at Cassilis are very encouraging and the company now wish to develop an understanding of
the Snake vein.
The gold grades at Cassilis in mineralisation are averaging 7 grams per tonne with widths up to 4.5m. Similar to Brookville, assays are getting some strong silver lodes with some above 90g/t Ag (3ozs). The Cassilis gold vein in places pinches to approximately 1.5m
but the grades there are significantly higher at 16g/t Au and above. The mineralisation is open at length and depth and has a vertical rise above the adit of approximately 200m.
This is a significant mineralised body and current understanding of the structure indicates a high probability that the gold grades will be even richer at depth.
The plan for the Shamrock level (800m below the surface) is to probe out by drilling towards the rich (mineralisation bearing 0.5oz to 5.0oz of gold) Snake and Blacksmith veins. Following this program, the company will develop the Shamrock extension to intersect the Snake vein and then commence infill drilling on the Cassilis and Snake Veins from drill cuddies to be developed in the extension.
Drilling from the existing Snake adit which is 400m vertically above the Shamrock adit is also planned with the drilling intended to determine direction and plunge of the Blacksmith and Crisp lodes. The Snake vein has a potential strike length of 400m with an average expected width of 1.5m and is open at depth. Expectations are for at least 600m of vertical depth.
Mutiny's gold tenements cover much of the old Cassilis and Brookville Goldfields near the small town of Swifts Creek approximately 400km east of Melbourne. The Company's main focus is a drilling program targeted to evaluate the Cassilis Gold Mine.
"This funding commitment means that we are able to ensure that our exploration program will be maintained at its current pace and in the long-run, we will make considerable cost savings through economies associated with exploration and better identification andexploration of related ore bodies," Mr Greeve said.
"Our aim is to identify a JORC compliant resource in the quickest possible time-frame, with the intention of commencing mining at the Cassilis Gold project in a manner that maximises returns to shareholders."
It is believed that by advancing the drill program and linking the Cassilis and Snake mineralised veins the Company will achieve a double benefit. Not only will the drill program be more efficient but the deferred bulk sampling program will be more economical and provide greater geological information as we determine a more precise target on the Cassilis vein system and, at the same time, develop and drive on the Snake vein system via the new extension plan.
As the placement and associated capital raising is subject to shareholder approval the company has called an General Meeting to be held on 30 April 2007.