Perth-based gold explorer Primary Gold will raise up to $2.4 million for its Toms Gully mine at the Mt Bundy gold project in the Northern Territory with its appointed lead manager Patersons Securities to underwrite up to $1 million to the rights issue.
Eligible shareholders will be offered two new fully paid shares for every three shares held at an issue price of 5 cents per new share, representing a 55 per cent discount to the last closing price of 11 cents per share before the company placed itself in a trading halt.
Subscribers to the rights issue will also receive one free attaching new option for every two new shares subscribed for and issued, exercisable at 10 cents up until December 31, 2015.
The company recently completed a feasibility study for the recommencement of gold production at Toms Gully supporting initial probable ore reserves of 775,000 tonnes at 6.9 grams per tonne for 175,000 ounces of gold.
Production is forecast to commence in September 2014 pending the outcome of the company’s capital raising.
Primary Gold also holds prospects in the northern Pine Creek region which is currently under-explored.
The company changed its name from Hydrotech International in February this year.
Shares in Primary Gold are unchanged, trading at 11 cents per share.
