Southern Cross Goldfields has launched a $5.2 million capital raising it says will underpin its transition from gold explorer to producer.
The Perth-based miner announced today it received strong support from clients of Patersons Securities for a 2 for 5 renounceable rights issue, priced at 4.5 cents per share.
The capital raising follows last week's announcement that Southern Cross had agreed to acquire Troy Resources' Sandstone gold project in the Murchison for $5 million.
Southern Cross said the funds would allow it to secure debt funding for its Marda gold project, as well as detailed engineering for the refurbishment and relocation of the Sandstone plant to Marda.
Feasibility studies have targeted initial production at Marda of 30,000 ounces per year from 2013, from an established JORC resource of around 600,000 ounces of gold.
“Our discussions with potential debt funding providers are progressing well, and we have already received a number of indicative offers,” Southern Cross managing director Glenn Jardine said.
“This capital raising will also ensure that SXG has sufficient funding to continue our exploration and development activities until such time as the final debt funding arrangement is agreed.”
At 1:30PM, WST, Southern Cross stocks were down 7.25 per cent, trading at 6.4 cents.