Gold Mountain (ASX:GMN) to raise $2.1m for PNG exploration

• Gold Mountain (GMN) is looking to raise up to $2.1 million through a renounceable rights issue
• For every five shares held, eligible shareholders will be offered one new share priced at one cent each, which represents a 25 per cent discount to the 30-day VWAP of 1.34 cents
• Shareholders will also receive one free-attaching option for every two shares subscribed for, exercisable at 2 cents within two years from issue
• Gold Mountain plans to use the money for drilling and exploration work at its Wabag project in Papua New Guinea
• Company shares are down 4.35 per cent and trading at 1.1 cents

Gold Mountain (GMN) has announced it will raise up to $2.1 million through a renounceable rights issue.

Shareholders will be offered one new share for every five existing shares held on February 24 with shares priced at one cent each.

The rights issue price represents a 25 per cent discount to the 30-day volume-weighted average price (VWAP) of 1.34 cents and 34 per cent to the 90-day VWAP of 1.52 cents.

Shareholders will also receive one free-attaching new listed option for every two new shares subscribed for. The options are exercisable at 2 cents each within two years of their issue date.

Mahe Capital acted as Lead Manager and Underwriter of the rights issue, which is partially underwritten to $500,000.

The rights issue will be open from March 1 until March 15 (unless extended), and eligible shareholders can apply for shortfall in excess of their entitlement.

Once completed, Gold Mountain expects to have $3.1 million in cash to fund activities at its Wabag project in Papua New Guinea.

Specifically, the rights issue will support the 6000 to 8000-metre drilling program at Mt Wipi, compiling and reviewing geological data for highly prospective target areas, as well as continued regional exploration activities and general working capital.

Gold Mountain was down 4.35 per cent to trade at 1.1 cents at 2:22 pm AEDT.