30/10/2009 - 12:25

Troy's $25m capital raising hits shares

30/10/2009 - 12:25

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Junior gold producer Troy Resources' plans to raise almost $25 million to continue development at its Casposo gold project pushed down its share value as much as five per cent in trading this morning.

Junior gold producer Troy Resources' plans to raise almost $25 million to continue development at its Casposo gold project pushed down its share value as much as five per cent in trading this morning.

Shares had fallen seven cents, or 2.83 per cent, to $2.40 at 1417AEST but did fall as low as $2.34 during the morning session, equating to a drop of 5.26 per cent.

Troy's board plans to raise $24.9 million in a one for six non-renounceable rights issue at two dollars a share, a 19 per cent discount to Troy's last traded share price on Wednesday.

Euroz Securities, Argonaut Capital and Bell Potter Securities will underwrite the issue and all Troy directors will take part in the raising despite initial disagreements on the move.

Troy chairman John Dow said the fully underwritten issue allows the company to continue new mine construction at Casposo with certainty.

"It also provides shareholders with an opportunity to maintain their shareholding in the company." Mr Dow said in a statement.


 

Full announcement below:

TROY to raise A$24.9m from UNDERWRITTEN entitlement issue

Perth, Western Australia: Growing junior gold producer, Troy Resources NL (Troy or the Company) (TSX, ASX: TRY) is pleased to announce a capital raising of $24.9 million via an underwritten pro-rata, non-renounceable entitlement issue (Entitlement Issue) to maintain project development momentum of the Company's Casposo gold-silver project.

Troy Chairman, John Dow, said, "This fully underwritten issue allows the Company to continue new mine construction at Casposo with certainty. It also provides Troy shareholders with an opportunity to maintain their shareholding in the Company. I am also pleased to report to shareholders that this Entitlement Issue has the unanimous support of the full Troy Board".

Entitlement Issue

Troy intends to offer existing shareholders the opportunity to subscribe for fully paid ordinary shares (New Shares) at A$2.00 per New Share pursuant to a 1 for 6 pro-rata non-renounceable Entitlement Issue to raise A$24.9 million. The Company has reserved the right to make a PRIVATE placement of securities to certain jurisdictions on similar terms to the Entitlement Issue

The Entitlement Issue is fully underwritten by Euroz Securities Limited, Argonaut Capital Limited and Bell Potter Securities Limited. The issue price of a New Share represents a 19% discount to Troy's last traded Share price prior to announcement of the capital raising and a 17% discount to the theoretical ex-rights price.

All directors of Troy have confirmed their intention to participate in the Entitlement Issue.

Under the Entitlement Issue, Troy shareholders as at the record date will be able to subscribe for New Shares at an issue price of A$2.00 per New Share on the basis of 1 New Shares for every 6 Shares held at the record date.

Use of Proceeds

The proceeds of the Entitlement Issue will be fully applied to construction activities at the Casposo Project in Argentina.

Indicative Timetable

The timetable is currently being finalised with the details, including the record date, expected to be announced in approximately one week's time when it is expected the Entitlement Offer documents are lodged with ASX.

Disclosure

The rights to subscribe for shares of Troy at A$2.00 per share pursuant to the Entitlement Issue will not be registered under the United States Securities Act of 1933 Act, as amended and may not be offered or sold in the United States or to, or for the account or benefit of, US persons.

The listing of the New Shares on the Toronto Stock Exchange (TSX) remains subject to the approval of the TSX.

 

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