09/10/2008 - 18:06

Resolute unveils $51m rights issue

09/10/2008 - 18:06

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Perth-based Resolute Mining Ltd has unveiled an ambitious $51 million capital raising with funds to go towards the continued re-development of its African gold project which is expected to begin production this month.

Perth-based Resolute Mining Ltd has unveiled an ambitious $51 million capital raising with funds to go towards the continued re-development of its African gold project which is expected to begin production this month.

The company announced a one-for-three renounceable rights issue at 55 cents each, with Patersons Securities Ltd appointed as lead manager.

 

Below is the announcement:

Resolute Mining is pleased to advise that it is now finalising its funding requirements to complete the re-development and ramp up of Syama and maintain its other development activities. The funding required for this important work is $50-$60m.

The Company wishes to announce a 1 for 3 renounceable rights issue at 55ยข to raise up to $51m. Patersons Securities Limited has been appointed as lead manager to the rights issue and to facilitate subscriptions for any shortfall to the rights issue to complete the balance of the Company's funding requirements.

The Syama Project is scheduled to pour its first gold during this month from oxide material as production commences ahead of the completion and commissioning of the of the sulphide circuit expected in the December/January period.

Group forecast production for financial year 2009 is 400,000 ozs at a cash cost of A$700. At current record gold prices of around A$1,300 per ounce, this implies a very healthy prospective gross operating margin and a positive impact on the intrinsic value of the Company.

The Company advises that it has drawn $10m of the $20m unsecured standby facility and has received these funds. The debt provider has the option to convert the amounts owing under the facility into Resolute Mining convertible bonds based on market terms at the time.

In accordance with the terms of the facility 1,250,000 options to acquire Resolute Mining ordinary shares at a price of $1.64 at any time over the next 3 years has been granted to the debt provider.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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