Tanami Gold has announced a $65.3 million capital raising at a massive discount to its current share price, in order to repay its debts and complete a definitive feasibility study at its Central Tanami gold project in the Northern Territory.
The gold miner announced today it would seek to raise the funds through an entitlements issue for existing shareholders at 20 cents per share, which has been fully underwritten by lead manager Patersons Securities.
The funds will be used to repay the company’s debts with AP Finance Limited, complete a definitive feasibility study for Central Tanami, and provide additional working capital.
The Central Tanami project, which is located around 90 kilometres from the company’s operating Coyote gold mine, has a mineral resource of approximately 2.634 million ounces of gold.
Between 1987 and 2005 approximately 2 million ounces were mined from 43 open pits across the 63-kilometre north-south zone.
The definitive feasibility study is currently under way and is expected to be completed by April 2013.
Major shareholder Allied Properties Resources Ltd has committed to taking up its entitlement under the offer.
Chairman Arthur Dew said details of the offer would be lodged with the Australian Securities and Investments Commission and the ASX around February 8.
Tanami's share price fell 25.5 cents today to 41 cents.