Navigator in $40m debt, raising plans

Navigator Resources will press ahead with its acquisition of the Bronzewing gold operation after securing a $16 million debt facility and revealing plans for a $24 million capital raising.

In a statement today, the West Perth-based company said it expects to complete the acquisition of the mine by the end of this month.

The mine has been on care and maintenance for over a year as previous owner View Resources fell into administration.

Earlier this year, Navigator reached agreement with administrators to buy the mine for $9.55 million and also agreed to pay $6.45 million in environmental bonds.

Navigator today said it will need $36.4 million to bring Bronzewing back into production at a rate of 100,000 ounces each year.

Meantime a further $2 million will be needed to conduct a trial mining exercise at Navigator's Leonora gold project and an additional $1.6 million for general working capital.

In total, Navigator said it will need a total of $40 million to pursue the work.

The company said it has accepted a $16 million senior debt facility from RMB Resources which comes with a condition that Navigator raise at least $6 million.

As a result, Navigator has appointed Casimir Capital LP to manage a $15 million institutional placement with shares priced at a discounted 17 cents each.

In addition, Navigator will also undertake a $9 million rights issue with shares also priced at 17c each. The company said it is in talks with a number of potential sub-underwriters for the rights issue.

Shares in Navigator slipped one cent to 20c at 12:01 AEST.

The Bronzewing operation is anticipated to be back online in March 2010.