Signature to raise $16m for Konongo

West Perth-based Signature Metals says it has secured $16.2 million to fund its South African Konongo gold project to production through a rights issue and share placement.

The gold explorer said it had firm commitments from subscribers to raise $9.2 million through a 3.3 cents per share placement to institutional investors.

Also, Signature will undertake a one for 10 non-renounceable entitlements issue, also at 3.3 cents per share, to raise approximately $7 million.

Patersons Securities have been appointed lead managers for the placement, and will also underwrite the share issue.

Signature Minerals managing director Bill Oliver said in a statement the completion of the placement and share offer would put the company in a strong financial position through the initial production phase at Konongo.

"Funds will also be used to accelerate the Company's exploration programme, which has recently resulted in the successful discovery at the Kyereben prospect," Mr Oliver said.

"Follow up drilling will be carried out at this prospect, as well as drill testing of other targets within the project area.

"Exploration of the manganese occurrences identified during 2010 is also planned."

Shares in Signature dipped this morning, and at 10:05AM (WST) were down 15 per cent, to trade at $0.03.