Tanami Gold NL has announced a $20 million share placement, to be undertaken in two tranches, to help drive its imminent transition to gold production at its 100 per cent owned Coyote gold mine in the Western Tanami region of WA.
Tanami Gold NL has announced a $20 million share placement, to be undertaken in two tranches, to help drive its imminent transition to gold production at its 100 per cent owned Coyote gold mine in the Western Tanami region of WA.
Following completion of the placement, Tanami will be fully funded to complete the Coyote development, with no debt and no hedging - providing full exposure to the current favourable Australian dollar gold price.
Tanami has undertaken a placement of 108 million shares at an issue price of 18.5 cents to institutional investors in the United Kingdom, North America and Australia, as well as to sophisticated investor clients of Perth-based stockbroking firm, Hartleys Limited.
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- Institutional and sophisticated investors in the UK, North America and Australia subscribe for $20M placement at 18.5 cents, to be undertaken in two tranches.
- Funds raised to be used to underpin final development of fully permitted Coyote Gold Mine and launch a major gold exploration program.
- First gold production at Coyote scheduled for end of the June 2006 Quarter, with mining expected to commence in April 2006.
Tanami Gold NL today announced a $20 million share placement, to be undertaken in two tranches, to underpin its imminent transition to gold production at its 100%-owned Coyote Gold Mine in the Western Tanami region of WA. Following completion of the placement, Tanami will be fully funded to complete the Coyote development, with no debt and no hedging - providing full exposure to the current favourable Australian dollar gold price.
Tanami said today (Thursday) it has undertaken a placement of 108 million shares at an issue price of 18.5 cents to institutional investors in the United Kingdom, North America and Australia, as well as to sophisticated investor clients of Perth-based stockbroking firm, Hartleys Limited.
54 million shares will be allotted in the first tranche upon receipt of the placement monies, which is expected within a week. The balance of 54 million shares will be allotted subject to shareholder approval at a General Meeting of shareholders to be convened in early April 2006.
Tanami's Executive Chairman, Mr Denis Waddell, said the funds raised would be utilised to fund the final development of the Coyote Gold Mine and for a substantial exploration program designed to convert existing resources to reserves, and undertake further drilling to upgrade Tanami's resource base and accelerate regional exploration within the Company's extensive tenement holdings.
"This is a very significant milestone for the Company, with existing and new institutional, professional and retail investors backing our imminent transition to gold production in the Tanami region," Mr Waddell said.
"Importantly, the funds raised through this placement will not only enable us to move rapidly towards gold production at Coyote, they will also underpin a major exploration campaign across our extensive exploration portfolio in the Tanami-Arunta region," he added.
"This will focus on known satellite deposits and near-mine opportunities, including down-plunge and along-strike extensions of the Coyote Gold Mine, as well as drill programs to accelerate our regional exploration targeting new discoveries."
Tanami recently announced an updated reserve estimate for the Coyote Project comprising 1.035 million tonnes at 8.2 g/t gold for 272,000 ounces, within an overall project resource of 3.8 million tonnes at 4.7g/t gold for 572,000 ounces. This underground reserve will underpin a Stage 1 project of approximately 5 years at a forecast production rate in excess of 60,000 ounces per annum.
Refurbishment of the recently purchased Coyote Processing Plant is currently underway and is on schedule to meet the current development and production schedule.
Mr Waddell said open cut mining operations would commence at Coyote in April 2006, with first gold production targeted for June 2006. Remaining capital requirements to commence production are estimated at approximately $9 million.
Tanami has already announced a number of key appointments for the Coyote Gold Mine, including senior operational and managerial personnel, the appointment of BeMeX Corporation to manage construction and operation of the recently acquired gold plant, and CDE Capital Pty Ltd as the open pit mining contractor for the Project.
"This is a major step for the Company, some 12 years since our establishment as a gold exploration company focused on the Tanami-Arunta region of central Australia," Mr Waddell commented. "We are looking forward to the prospect of becoming Australia's next gold producer, with significant exploration leverage from our world-class tenement portfolio, as we make the transition to production over the next few months."
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Background Information
Tanami Gold NL (ASX: TAM) is a successful Australian gold exploration and development group. Since listing on the ASX in 1995, Tanami has acquired a major ground position in the Tanami-Arunta Province of central Australia, gaining access to large areas through negotiating agreements with the traditional Aboriginal owners, and completing successful regional early stage exploration programs in its own right and through joint venture partners.
Tanami currently holds granted tenements and tenement applications in the region covering 51,000 square kilometres.
On 24 November 2003 the Company announced that it was the successful bidder for AngloGold's Coyote Project in the Western Tanami. The high quality Coyote gold deposit together the Company's existing Kookaburra and Sandpiper deposits take the Company's total resources in the Western Tanami to 572,000 ounces of gold.
The combined Coyote and Larranganni resources provide a strong base for Tanami to commence gold production, with a Feasibility Study completed during 2005 leading to project development during the March 2006 quarter and first gold production by mid-2006.
For further information, refer to www.tanami.com.au
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