Swick Mining Services raises $14.5m

Swick Mining Services will raise $14.5 million through a share placement and rights issue to fund expansion plans in North America and the construction of new drilling rigs.

The placement will see around 22.8 million shares issued at a discounted price of 36 cents each to institutional and sophisticated clients of Euroz Securities.

The placement, which falls in Swick's 15 per cent raising capacity, is raised $8.2 million.

Swick said the placement was oversubscribed several times.

Meantime, the rights issue will see one new share offered for every 10 shares held at a price of 36 cents each to raise up to $6.3 million.

The rights issue is fully underwritten by Euroz and the directors have committed to taking up around $1.1 million in entitlements.

Funds raised will be applied to towards Swick's North American expansion program, working capital, part funding of new drilling rigs and strengthening the balance sheet.

Shares in Swick were unchanged at 43 cents at 12:17 AEST.

Meanwhile, Swick has secured its first underground diamond drilling trial in Canada at the LaRonde gold mine, one of the country's largest gold deposits, owned by Agnico-Eagle Mines.

The trial covers a three-month period, starting in September.

"The trial is a key milestone for Swick's North American expansion program, providing the opportunity to showcase the Company's market leading rig on Canadian soil for the first time," Swick said.

Swick said it will mobilise a new underground diamond drill rig from its Sudbury headquarters in Canada for the trial.