Gold Mountain Mining (ASX:GMN) announces $5.1m rights issue

• Gold Mountain Mining (GMN) will raise $5.1 million through a renounceable rights issue to further fund exploration work
• GMN will also use the extra cash to help pay down its debts, with $1 million worth of loans and creditors to be repaid through subscribing under the offer
• Under the rights issue, investors will be offered one new share for every three held, with new shares priced at 2 cents each —a 37 per cent discount
• GMN will issue a new attaching option for every three new shares received, with an exercise price of 4 cents and a scratch date of 18 months
• Company shares are down 6.25 per cent at 3 cents each at 3:44 pm AEST

Gold Mountain Mining (GMN) will raise $5.1 million through a renounceable rights issue to further fund exploration work.

The company said it would also use the funds to help pay down its debts, with $1 million worth of loans and creditors set to be repaid through subscribing under the offer.

Under GMN’s newly announced rights issue, investors would be offered one new share for every three held, with new shares priced at 2 cents each. The company said that price represented a considerable discount.

For every three new shares issued, GMN would issue an attaching option as well, with each option to have an exercise price of 4 cents and a scratch date of 18 months.

The rights issue has been partially underwritten by Mahe Capital for $2.05 million, while company directors have committed just over $643,000.

Gold Mountain plans to use the majority of the funds to further explore its Wabag Project, including a targeted drill program at the project’s Mt Wipi area of Papua New Guinea.

GMN announced it would begin drilling Mt Wipi again later this month with the initial four-hole program set to focus on three previously defined exploration targets at the site.

GMN shares were trading down 6.25 per cent at 3 cents each at 3:44 pm AEST.