Resolute to raise $196m, repay debt

Resolute Mining has agreed to repay all amounts outstanding under a $US130 million loan agreement with Taurus Funds Management, which it said would be funded by an equity raising.

Resolute will issue around 132.7 million shares through a tranche one share placement at $1.10 per share, fully underwritten by Canaccord Genuity (Australia).

Under the tranche two share placement, Resolute will issue approximately 22.7 million shares to directors and Resolute’s largest shareholder, ICM Group, to raise $25 million.

Resolute’s directors have agreed to participate in the equity raising for up to $500,000 in total.

The company is seeking to raise a further $25 million via a share purchase plan to Australia and New Zealand shareholders on the same terms as the placement.

It acquired 94 per cent of Toro Gold in August last year in a deal worth $US274 million, which also included 142.5 million Resolute shares.

Toro's flagship asset was the Mako gold mine, located in Senegal, West Africa.

In 2018, the Mako mine produced 156,926 ounces of gold at an all-in sustaining cost of $US655/oz.

Resolute managing director John Welborn said the ability to repay the Toro Gold acquisition facility would save Resolute extension fees and interest payments.

“Today’s equity raising will support and enable the complete refinancing of our debt facilities during the current quarter,” he said.

“Completion of the equity placement, and the refinancing of our senior syndicated loan facilities, will enable the company to simplify its capital structure and facilitate the retirement of debt facilities provided by Taurus.”

Resolute said its current trading halt would likely be lifted upon completion of the tranche one placement, which is scheduled to commence on Thursday.

The company holds a 90 per cent interest in the Mako gold mine and an 80 per cent interest in the Syama gold mine in Mali, also in West Africa.

It wholly owns the Bibiani gold mine in Ghana and the Ravenswood gold mine in Queensland.