St Barbara to raise $100m for WA gold projects

Gold miner St Barbara Ltd is seeking to raise $100 million of new equity to fund further exploration and development of its Western Australian gold projects, including its recent Tower Hill discovery near Leonora and its nearby Gwalia mine.

The funds will be raised through an institutional placement, currently underway, and a share purchase plan for existing shareholders.

The proceeds will be used to fund exploration and development at Tower Hill and, subject to regulatory approvals, the commencement of mining in the September quarter of 2008.

The Melbourne-based company has budgeted to spend $25 million at Tower Hill over the 2008 and 2009 financial years.

The funds will also be used to complete its Gwalia mine development, which is budgeted to cost $161 million over the next two years.

The company intends to spend $38 million on development of reserves and increased production at its Southern Cross mines.

It has also budgeted to spend $69 million on other exporation and development activity.

Adding in working capital expenses, St Barbara plans to spend a total of $362 million over te next two years.

The funding sources include the $100 million capital raising, a planned $50 million bank debt facility, operating cash flows and existing cash reserves.