- Gold explorer Los Cerros (LCL) has raised $10 million to advance drilling at its Quinchia project in Colombia, and to pay off debt
- The company was aiming to raise enough money to make a one-off, discounted payment of $2.21 million to FirstRand Investment, which would have otherwise totalled $3.5 million
- The payment will also reduce potential future royalty payments on the Quinchia project from $15 million to $14 million
- The debt and royalty stem from Los Cerros’ acquisition of the Quinchia project from FirstRand in 2016
- The company is now also fully funded to undertake a multi-rig drilling program at Quinchia to “aggressively” explore its flagship holding
- Los Cerros is trading 27.59 per cent higher at 18.5 cents
Gold explorer Los Cerros (LCL) has raised $10 million to advance drilling at its Quinchia project in Colombia, and to pay off debt.
Private placement
The placement to professional and sophisticated investors was heavily oversubscribed, with applications received for four times the target amount.
The company was aiming to raise enough money to make a one-off, discounted payment of $2.21 million to FirstRand Investment, which would have otherwise totalled $3.5 million.
The payment will also reduce potential future royalty payments on the Quinchia project from $15 million to $14 million.
The debt and royalty stem from Los Cerros’ acquisition of the Quinchia project from FirstRand in 2016.
With the $10 million raised, Los Cerros is now fully funded to extinguish the FirstRand debt and to undertake further exploration at Quinchia.
Shares will be issued at 11.5 cents each, representing an 11.2 per cent discount to the company’s 10-day volume-weighted average price.
Subject to shareholder approval, company Chairman Ross Ashton will subscribe for $30,000 in shares. Mr Ashton is already one of Los Cerros’ top 10 shareholders.
Multi-rig drilling
Los Cerros will undertake a multi-rig drilling program at Quinchia to “aggressively” explore its flagship holding.
Recent drilling at the Tesorito prospect revealed the potential for a large gold porphyry system. The best intercepts included one sample of 384 metres at 1.01 grams per tonne starting from 16 metres below the surface.
Los Cerros Managing Director Jason Stirbinskis says the strong support for the placement is indicative of the great potential at Quinchia.
“We view this incredibly strong result as a mandate to be bold and proactive in seizing the opportunity created by the confluence of our established strategic direction, recent drilling success, investor traction and strong gold price,” Jason said.
“We are very pleased to see a number of reputable mining investors join our register with this placement, and see it as a strong endorsement of the quality of the Quinchia Project,” he continued.
We expect this coming year to be a very positive time for Los Cerros and for our shareholders,” he concluded.
Los Cerros is now able to follow up on the promising results from Tesorito, and to conduct further resource definition and expansion drilling at a number of other prospects and deposits across Quinchia.
Los Cerros is trading 27.59 per cent higher at 18.5 cents at 3:07 pm AEST.