PMI Gold signs agreement to raise $100m

PMI Gold Corporation has entered an agreement with a syndicate of underwriters to raise $C100 million ($A99 million) for the development of its Obotan gold project in Ghana.

The syndicate, which is led by Clarus Securities and RBC Capital Markets, has agreed to purchase more than 119 million PMI shares at 84 Canadian cents ($A0.83) each.

Co-underwriters to the offer include Euroz Securities, Canaccord Genuity Corp, GMP Securities and Raymond James.

PMI said it would use the proceeds to fund development of the Obotan project, at which first production is targeted for the start of 2014.

The company is expecting to receive all relevant approvals for the project in the fourth quarter of 2012.

At 11:30AM, WST, PMI stocks had sunk 10.5 per cent, trading at 85 cents.