Tianshan to raise $15.5m for gold feasibility studies

Perth-based gold explorer Tianshan Goldfields Ltd will raise $15.5 million through a placement to fund feasibility studies and a drilling program on its Gold Mountain project.

The full text of a company announcement is pasted below

Tianshan Goldfields Limited ("Tianshan" or "the Company") is pleased to announce that it intends to place 31,000,000 ordinary shares at A$0.50 to raise A$15.5m (before costs) as an excluded offer to institutional investors. A total of 28,000,000 shares will be issued on or about the 16th of November 2007, subject to settlement of proceeds, utilising the Company's 15% placement capacity. The balance of 3,000,000 shares will be issued subject to receipt of shareholder approval pursuant to ASX Listing rule 7.1 at a shareholders meeting planned to occur by January 2008.

The placement proceeds will be applied to the completion of feasibility studies and the 2008 drilling field programme for the Gold Mountain project.

Pre-Feasibility studies are well advanced with the aim to fast track gold production at Gold Mountain and with the goal to become a low cost gold producer. Pre-feasibility Study completion and Mining Permit application is targeted for June 2008. The company's initial development strategy is to commence producing an initial 80,000-100,000 oz pa by the end of 2009.

With the 2007 field programme nearing completion the new resource estimation is presently underway with completion planned on or about the end of the current quarter.

At the commencement of such a critical stage in the development of the Company, an appropriate executive options package is proposed to provide significant long term incentives and loyalty driven component to both Directors and Senior Management team.

In order to bring the number of executive options currently held closer to industry standard, the board proposes to issue a further 8.15 million executive options at an exercise price of 60c expiring 31st December 2010. These options will be issued pursuant to obtaining relevant shareholder approval. The proposed allocation is as follows;